AI to Create $2.9 Trillion in Business Value Opportunities by 2021
Gartner Vice President Lovelock: “Revenue growth will outweigh investment costs”

Gartner projected that global IT spending in 2018 would reach $3.7 trillion, an increase of 4.5% from the previous year.

"Global IT spending is expected to continue growing for the next few years. However, uncertainty is expected to persist as companies consider factors such as Brexit and the possibility of a global recession," said Vice President John David Lovelock. "Despite these circumstances, companies will continue to invest in the IT sector to drive revenue growth, but spending patterns will change." He further explained, "Projects such as digital business, blockchain, and machine learning will serve as the primary drivers of growth."

Global software spending increased by 9.5% in 2018 and grew by an additional 8.4% in 2019 to reach a total of $421 billion, with enterprise software expected to continue its strong growth.

Companies were expected to increase spending on enterprise application software in 2018, along with expanding their budgets for cloud application services (Software as a Service, hereinafter SaaS). As many SaaS-based solutions become available, they are driving the adoption and investment of SaaS in various fields, such as financial management systems (FMS), human resource management (HCM), and analytics applications.

The device segment is projected to grow by 5.6% in 2018. While the volume of mobile phone sales is expected to decrease, end-user spending on mobile phones is projected to rise slightly as the average selling price increases. For PCs, strong growth is expected in business markets in China, Latin America, and Eastern Europe due to Windows 10 migration, but overall growth in 2018 is projected to be sluggish. Although the impact of the iPhone 8 and iPhone X, released in 2017, was low, iOS shipments are forecast to grow by 9.1% in 2018.

“Looking at the key areas that will drive spending, we project that business value opportunities generated by AI will reach $2.9 trillion by 2021 and improve employee productivity by approximately 6.2 billion hours,” said Vice President Lovelock. “In addition, AI creates business value by providing insights for improved efficiency and personalized customer experiences, driving engagement and commerce, and expanding revenue generation opportunities as part of new business models powered by data insights.”

He added, “Investment is necessary if you are looking to find potential business value or consider short-term cost reductions. AI investment can improve customer experience and revenue, and the resulting positive network effects and revenue growth will outweigh the investment costs.”