TORONTO — Canadian IT spending is projected to total $87.8 billion in 2019, an increase of 1.1% year-over-year, according to the latest forecast by research firm Gartner Inc. This is down from 3.5% growth in 2018. Global IT spending is also forecast to grow 1.1% in 2019, reaching $3.79 trillion.
“Uncertain economic and political environments and trade wars are slowing growth in IT spending in Canada in 2019,” said John-David Lovelock, research vice-president at Gartner, in a prepared statement. “Specifically, steel and aluminum tariffs, uncertainty around car manufacturing, continuing problems in the country’s oil industry and indecision around the pending trade deal to replace the North American Free Trade Agreement (NAFTA) are some of the impacts affecting IT spending. However, we expect some of that uncertainty to be resolved by 2020 and IT spending is expected to pick up.”
According to the report, Canadian organizations’ use of cloud services is only second to the U.S, which is reflected in the flat growth for data center systems in 2019 and the strong growth for enterprise software in 2019 and 2020. The largest cloud shift has so far occurred in application software and that segment is poised for continued strong growth. Gartner also expects increased growth for the infrastructure software segment over the forecast period.
“We are seeing an increased investment in off-premises capabilities and decreased investment in on-premises capabilities,” said Lovelock.
He continued, “The choices CIOs make about technology investments are essential to the success of digital business. Disruptive emerging technologies, such as artificial intelligence, will reshape business models as well as the economics of public- and private-sector enterprises. Investment in AI, for example, has experienced a huge jump from 2018, and AI will have a major effect on IT spending.”