If this past year has proven anything, it’s that making long-term predictions can be a challenge. After all, who would have predicted a large portion of the workforce would be fully remote and we’d be staying six feet away from each other in grocery stores for most of the year?

Even though a curveball like COVID-19 could happen at any time, it doesn’t mean we should completely stop forecasting what things will look like in IT and beyond over the coming months.

We’ve rounded up four IT predictions for 2021 from market intelligence and research firms Computer Economics, IDC (International Data Corporation), Forrester, and Gartner to shed some light on what the year ahead may hold.

1. IT budgets will experience a K-shaped recovery

In 2020, Computer Economics reported IT operational budgets were down across the board. Every industry was affected, with all sectors experiencing an average spending loss of 5% to 11%. Take a look at this chart from Computer Economics’ report called The Impact of COVID-19 on IT Budgets in 2020 for an industry-by-industry breakdown of spending changes:

Sector IT Operational Spending Change
Manufacturing -4% to -7%
Retail 0% to -15%
Financial Services -5% to -12%
Healthcare -8% to -15%
Energy/Utilities 0% to -5%
High Tech 0% to -9%
Transportation -10% to -15%
Professional Services -3% to -9%
Higher Education -5% to -15%
Public Sector -4% to -6%
All Sectors -5% to -11%

Source: Computer Economics

Despite the downward trends all around in 2020, Computer Economics predicts a “K-shaped” recovery for IT budgets in 2021.

If you’re unfamiliar with the term, Computer Economics defines a K-shaped recovery as “a phenomenon where different parts of the economy diverge in their recovery. Their revenue (and subsequent IT budgets) resemble the arms of the letter K with some companies seeing increases and others seeing decreases.”

As part of the predicted K-shaped recovery, a survey by Computer Economics says that 30% of companies expect to increase their IT budgets in 2021, 29% are decreasing their budgets, and 41% are leaving budgets unchanged.

2. Companies will have to find ways to cope with debt

COVID-19 inspired digital transformation at a scale and speed that caused many companies to execute on their multi-year plans within weeks.

Acquiring new software and providing employees with equipment to facilitate remote work came at a steep and immediate cost which most CIOs and IT managers couldn’t plan for. In some cases, they exceeded their entire budget for the year in a matter of days.

IDC says coping with the debt that added up during the pandemic will shadow 70% of CIOs in 2021 and through 2023. As a result, many companies are expected to experience “forced march” migrations to the cloud—they’ll have to swap costly on-premises solutions for cheaper cloud-based alternatives.

3. Adoption of public cloud services will accelerate

Before the pandemic, Forrester predicted the public cloud infrastructure market would grow 28% to reach $113.1 billion in 2021.

Following strong revenue growth by the four largest public clouds—AWS, Microsoft Azure, Google Cloud, and Alibaba—throughout the pandemic, Forrester now predicts the global cloud infrastructure market will grow 35% to $120 billion in 2021.

What’s behind the uptick in public cloud services adoption? Forrester says companies are prioritizing speed and customer experience over everything else, and public clouds help them achieve their goals. For example, Etsy used a public cloud to meet a spike in e-commerce during lockdowns while Lowe’s got a custom curbside pickup app up and running in three days using public cloud infrastructure.

4. Businesses will adopt an “operate from anywhere” model

A long-term effect of the COVID-19 pandemic, which Gartner says we’ll see in 2021 and beyond, is a shift to being digital by default.

Gartner suggests that more companies will have to adopt a model for “anywhere operations,” which prioritizes being digital first and remote first. Gartner says, “At its core, this operating model allows for business to be accessed, delivered and enabled anywhere—where customers, employers and business partners operate in physically remote environments.”

In fact, Gartner goes so far as to say an anywhere operations model will be vital for any business that wants to successfully emerge from the pandemic, and it may be worth considering adopting in your own organization.

What predictions do you have for IT in 2021? Let us know in the comments below.

Steve Petryschuk

About Steve Petryschuk

As Auvik’s Product Strategy Director, Steve works with prospects, clients, and the IT community at large to identify, research, and analyze complex IT Operations challenges, helping guide the Auvik roadmap to better service the IT community. Steve holds a Bachelor of Engineering and Management and is a registered Professional Engineer in Ontario with IT, networking, and IT security experience spanning product management, devops, systems admin, solutions engineer, and technical trainer roles.

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