When a market is really big it does not need to grow by much to generate a colossal opportunity – and worldwide IT spending is projected by Gartner to total $4.5 trillion in 2022; while that’s an increase of just 3% from 2021, the technology industry continues to hold massive potential for business development.
► Gartner forecasts worldwide IT spending to grow 3% in 2022
► Cloud spending accelerating amid uncertainty
► IT talent crunch is affecting IT spend
► Firms making more use of IT services providers
This does represent a slowdown from the 5% growth seen in 2021 that was fuelled by higher consumer sales of PCs, tablets and printers, but Gartner says that the overall outlook is positive, even though inflation is a concern globally. This is not expected to deter IT investment plans for 2022 however, said John-David Lovelock, distinguished research vice president at Gartner. “Organisations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term.” Price increases and delivery uncertainty, exacerbated by the Russian invasion of Ukraine, have accelerated cloud spending, which saw 18.4% growth in 2021 and is expected to grow by 22.1% this year. Not only is cloud service demand reshaping the IT services industry, but it is also driving spending on servers to 16.6% growth in 2022, as hyperscalers build out their data centres.
As a result, spending on data centre systems is forecast to experience the strongest growth of all segments in 2022 at 11.1%. Cloud consulting and implementation and cloud managed services are expected to grow 17.2% in 2022, from $217 billion in 2021 to $255 billion in 2022, helping to drive the overall IT services segment to 6.2% growth in 2022 (see Table 1).
Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)
| 2021 Spending | 2021 Growth (%) | 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | |
|---|---|---|---|---|---|---|
| Data Centre Systems | 191,001 | 6.4 | 212,218 | 11.1 | 221,590 | 4.4 |
| Software | 735,869 | 14.7 | 806,800 | 9.6 | 902,182 | 11.8 |
| Devices | 808,580 | 16.0 | 767,872 | -5.0 | 790,888 | 3.0 |
| IT Services | 1,207,966 | 12.8 | 1,283,192 | 6.2 | 1,389,169 | 8.3 |
| Communications Services | 1,458,527 | 3.8 | 1,464,551 | 0.4 | 1,505,733 | 2.8 |
| Overall IT | 4,401,944 | 10.2 | 4,534,632 | 3.0 | 4,809,561 | 6.1 |
Source: Gartner (July 2022)
The critical IT skills shortage being felt across the globe is expected to abate by the end of 2023 when the corporate drive to complete digital transformations slows down and there has been time for upskilling and reskilling of existing staff. However, in the near term, CIOs will be forced to take action to balance increased IT demand and dwindling IT staffing levels.
The IT labour market continues to tighten, making it difficult to attract and retain talent. A Gartner survey of nearly 18,000 employees in Q1 2022 showed compensation is the number-one driver for IT talent attraction and retention. Service providers are increasing prices so they can offer competitive salaries, and this is driving an increase in spending in software and services through 2022 and 2023. Worldwide software spending is expected to grow 9.6% to $806.8 billion in 2022 and global spending on IT services is forecast to reach $1.3 trillion.
‘Additionally, CIOs are using more IT services to assist in the lack of skilled IT staff. Tasks that require lower skill sets tend to be outsourced to managed service firms to alleviate staff time, while critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,’ said Lovelock.
