Global IT spending is expected to total $4.7 trillion in 2023, an increase of 4.3% from 2022, according to the latest forecast from Gartner, Inc. As CIOs continue to lose competition for IT talentsthey are shifting spending toward technologies that enable automation and efficiency to drive growth at scale with fewer employees.
“Digital transformations of businesses are starting to transform,” said John David Lovelock, distinguished vice president analyst at Gartner. “IT projects are moving from a focus on external deliverables such as revenue and customer experience, to more internal efforts focused on optimization.”
The software segment will see double-digit growth in 2023 as organizations increase usage and reallocate spending on core applications and platforms that support efficiency gains, such as resource planning applications. enterprise (ERP) and customer relationship management (CRM). Vendor price increases will also continue to drive software spending throughout this year.
Although the overall outlook for business IT spending is positive, device spending will decline by 8.6% in 2023 due to the continued impact of the crisis. inflation on consumer purchasing power (see table 1).
Table 1. Forecast global IT spending (in millions of US dollars)
|
2022 expenses |
Growth 2022 (%) |
2023 expenses |
Growth 2023 (%) |
2024 expenses |
Growth 2024 (%) |
Data Center Systems |
221 223 |
16.6 |
217,880 |
-1.5 |
235 530 |
8.1 |
Devices |
766 279 |
-6.3 |
700 023 |
-8.6 |
748 150 |
6.9 |
Software |
811 496 |
10.7 |
922,745 |
13.7 |
1,052,956 |
14.1 |
IT services |
1,305,699 |
7.5 |
1,420,905 |
8.8 |
1,585,373 |
11.6 |
Communications Services |
1,423,075 |
-1.9 |
1,461,662 |
2.7 |
1,517,877 |
3.8 |
Global IT |
4,527,772 |
2.8 |
4,723,215 |
4.3 |
5,139,886 |
8.8 |
Source: Gartner (July 2023)
“The devices segment is experiencing one of its worst growth years on record,” Lovelock said. “Even as inflation slows slightly in some regions, macroeconomic factors continue to negatively impact discretionary spending and lengthen device renewal cycles. Device spending is not expected to return to 2021 levels until at least 2026.”
Businesses will integrate generative AI through existing tools
While generative artificial intelligence (AI) is a priority for many business executives and IT managers, but it is not yet having a significant impact on IT spending levels. Longer term, generative AI will primarily be integrated into businesses through existing spending.
“The best channel for commercializing generative AI is through software, hardware and services that organizations are already using,” Lovelock said. “Every year, new features are added to technology products and services in the form of add-ons or upgrades. Most companies will integrate generative AI in a slow, controlled manner by upgrading tools already built into IT budgets.
“When it comes to AI this year, organizations can thrive without having AI in production but they cannot exist without a story and a strategy,” Lovelock added.
Gartner’s IT spend forecasting methodology is based largely on rigorous analysis of sales from more than a thousand vendors across the entire spectrum of IT products and services. Gartner uses primary research techniques, supplemented by secondary research sources, to create a comprehensive database of market size data on which to base its forecasts.
Gartner’s quarterly IT spending forecast provides a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The latest research on IT spending forecasting is available to Gartner clients in “Gartner Market Databook, updated 2Q23. »
Learn more in Gartner’s free webinar Gartner IT Spending Forecast, 2Q23 Update: Market Winners and Laggards.
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