In terms of the four categories, spending will decline in all areas apart from Software; even here the growth (1,7% to $1,2 trillion) will be far less than in 2020 (8.0%). IT Services’ spending will be the same as in 2020, while Telecoms spending will decline by 1.0% to $2.2 trillion. The worst performance of all will be Hardware, which will decline by 3.8% to $1.3 trillion – similar to its –4.4% performance in 2020.
With revenue growth restricted in the year I expect suppliers to concentrate on generating higher profitability (the bubble sizes in my Figure above show comparative sizes of net profit from each category. In absolute terms software will generate the highest of all categories, growing by 0.9% to $304 billion. In comparison Telecom suppliers will only make $169 billion profit – 55% of the Software total despite having 176% of the spending total.
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