Software is not only the largest category of US tech budgets; it is also the fastest-growing, with increases of 10 percent in 2019 and eight percent in 2020, according to Forrester Research.
The main cause of this growth is the U.S. shift to cloud software, especially mult-tenant software as a service. Demand for front-office sales, marketing, and customer service software is especially strong, Forrester says.
Demand is also rising for back-office software for finance, human relations, purchasing, risk management, and core transaction systems.
The combination of rising spending on cloud and slowing revenues will put pressure on the other categories of computer equipment, communications equipment, and telecommunications services, Forrester also notes.
Communications equipment spending growth will slow to under three percent in 2019 and under 1.5 percent in 2020. And spending on voice and data wireless and wired telecom services will expand by around one percent each year.
“We do expect a slowing U.S. economy will lead to U.S. tech budget growth decreasing from almost six percent in 2017 and 2018 to five percent in 2019 and four percent in 2020, the firm predicts.
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