2020 is the crucible every enterprise software vendor needs to prove how resilient their apps & platforms are, showing prospects why moving workloads and apps to the cloud need to happen now. Global enterprise application software spending will reach $196B in 2020, a 4.7% drop from 2019 according to Gartner. Despite Covid-19 driving an economic downturn, software spending on cloud-based enterprise apps will increase by 6.8%. In comparison, spending on on-premises software will decline by 15.2% in 2020 based on Gartner's latest forecast analysis.
Factoring in how quickly and permanently millions of workers had to become productive working from home, Gartner also increased its forecast of the percentage of new cloud-based enterprise software purchases up from 75% in 2021 to 95%. All categories of enterprise software spending will shrink this year according to Gartner. The one bright spot is CRM. Gartner expects that category of enterprise software to grow at a Compound Annual Growth Rate (CAGR) of 12.15% between 2019 and 2024.