Global enterprise software spending to see first drop in ten years

Spending on enterprise software worldwide reached an all-time high of $458 billion in 2019, meaning that year-on-year, investment in this area dropped by almost 7%.

Between 2009 and 2020, global spending on enterprise software cumulatively adds up to $3.94 trillion.

The recently ended upwards trajectory in spending, according to Buyshares.co.uk research, began with the lowest figure for the sector on record of $225.51 billion in 2009, but the study states that the Coronavirus pandemic put a halt to growth globally.

“The Coronavirus crisis has forced many sectors of the economy to prioritise important aspects of their operations, explaining the drop in enterprise software spending,” said the report.

“Many businesses in the IT sector are keen on implementing measures that can keep their entities running during this pandemic. This strategy is replicated across the various business for 2020.”

Among the most significant increases year-on-year occurred between 2017 and 2018, a jump of 13.55% from $369 billion to $419 billion.

Between 2014 and 2015, spending remained stagnant at $310 billion, before growing to $326 billion in 2016.

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A new trajectory predicted

Despite spending on software being set to drop in 2020, a new trajectory has been predicted to occur in the future, with companies such as IBM, Oracle and Microsoft continuing to vie for a competitive edge in the sector.

“The recent surge in software publishing revenue has been a direct impact of businesses and consumers increasing their investment in software, computers, and video games,” said the report.

“Furthermore, the increasing investments from the private sector have spurred demand from businesses, alongside a rise in disposable income which is pushing consumers to spend on software. With emerging markets and new internet-based solutions fuelled by the popularity of mobile devices, there is a high consumption of mobile software.

“With the recovery plan after the Covid-19 pandemic, the sector is expected to embark on a growth trajectory with a specific focus on mobile and cloud platforms, corporate profits. Furthermore, the sector will also see an increase in investments in information technology infrastructure.”

The full report can be found here.