It’s been a while since we’ve had some good news for our profession, but we finally have some. 2021 IT spending forecasts are in, and it looks like 2021 is going to be a great year!

Gartner has issued its annual IT spending forecasts for 2021, and things are looking somewhat positive. Let’s explore.

Global IT Spending

After a year most people would rather forget, 2021 is well underway now, and it looks like global IT spending is going to be on the rebound.

While IT spending worldwide in 2020 saw a reduction of 3.2%, 2021 is projected to grow at a respectable 6.2%. All the sectors tracked in Gartner’s IT spending forecast were flat or shrank in 2020, each of those areas is projected to grow in 2021.

IT services spending

While not explicitly tracked by Gartner in this forecast, the IT services category is projected to see 6% growth this year, representing over $1 trillion in spending. IT services are where the vast majority of managed services spending takes place. It is also worth noting that of all the line items in this forecast, communications and IT services are the two largest global spending areas.

What this means for MSPs

For MSPs, 2020 wasn’t as bad as you might think. There were certainly some sectors hit worse than others, and these changes did impact those MSPs. However, on the whole, MSPs worldwide saw an across the board increase in the demand for services as work from home requests grew.

If MSPs had a busy year in 2020 and saw a 2.7% reduction (from the previous year) in IT services spending, imagine what 6% growth will feel like this year.

Projects coming back in 2021?

Projects will most likely see a return. One of the first areas hit by the pandemic economic shutdown was discretionary IT project spending. Those resources were immediately shifted to managed IT services and have largely been stable since March of 2020.

This year, however, we can likely expect a rebound as pent up demand and stalled projects return to organizational budgets.

A word of caution to MSPs

Do not become too reliant on project work. We know that MSPs who had stable recurring revenue were the most protected from market fluctuations during the pandemic shut down. Resuming projects this year is a good thing; don’t become too comfortable with it, and don’t allow project revenue to become your dominant revenue source.

2021 will be a busy year for MSPs. Economies appear to be reopening, IT spending is loosening, and MSPs are leading the way again. It’s going to be an exciting year.

Tags : Gartner,IT spending,managed services spending

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