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Tech spending is about to increase as pandemic restrictions ease
Forrester Research predicts an increase in IT spending growth from 6% to 7.4% by 2021
CIOs of companies across several industries in the US are expected to spend more on software in 2021, focusing on software related to process automation, artificial intelligence, and security. Forrester Research Inc. has a new forecast of the amount of money that companies are expected to spend this year, and it's bolstered by stimulus funding and stronger-than-expected economic data.
Here is what the report has found:
Companies and governments in the US are now projected to spend more on tech, which has risen to near $2 trillion. This is a 7.4% increase from last year.
In December, Forrester projected IT spending would fall 0.4% this year, compared with increases of 6.7% in 2019 and 1.8% in 2020. Then in April, Forrester forecast budgets would grow 6% year-over-year in 2021.
According to Andrew Bartels, a research analyst at Forrester, upward revisions reflect the impact of an economic stimulus package President Biden signed into law in March.
The communications equipment spending category is forecasted to rise 13.2% this year. Spending in the category fell last year as people moved to remote work, but it is expected to pick up again as offices have reopened.
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Software spending, the second-fastest growing segment of IT spending, is forecast to rise 10.4% this year, compared with an April forecast of 9.7% growth.
Within the software industry, it is estimated that spending on platforms for process automation and AI are poised to grow by 33% and 13%, respectively, this year. Security software spending is also predicted to increase by 11%
Spending on software will reach $482 billion. According to Forrester, software expenditure will be higher than CIO staff expenditure in 2022, for the first time in history.
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