Worldwide IT spending is projected to total $4.7 trillion in 2023, an increase of 4.3% from 2022, according to the latest forecast by Gartner. The firm says that CIOs continue to lose the competition for IT talent and are instead shifting spend to technologies that enable automation and efficiency.
► Emphasis shifting from external deliverables to automation and efficiency
► Software will see stronger growth
‘Digital business transformations are beginning to morph,’ said John-David Lovelock, distinguished VP analyst at Gartner. ‘IT projects are shifting from a focus on external facing deliverables such as revenue and customer experience, to more inward facing efforts focused on optimisation.’
The software segment will see double-digit growth in 2023 as organisations shift spending to core applications and platforms that support efficiency gains, such as ERP and CRM. Vendor price increases will also continue to bolster software spending through this year. While the overall outlook for enterprise IT spending is positive, devices spending will decline 8.6% in 2023 due to the ongoing impact of inflation on consumer purchasing power (see table).
| 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | |
| 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 | 803,335 | 10.3 | 911,663 | 13.5 | 1,039,175 | 14.0 |
| 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 |
| Overall IT | 4,519,610 | 2.7 | 4,712,133 | 4.3 | 5,126,105 | 8.8 |
Source: Gartner (July 2023)
The analyst noted that the devices segment is experiencing one of its worst growth years on record. Even as inflation eases slightly in some regions, it predicts that macroeconomic factors will continue to have a negative impact on discretionary spending and lengthen device refresh cycles. As a result, spending on devices is not expected to recover to 2021 levels until 2026.
While generative AI is top of mind for many business and IT leaders, it is not yet significantly impacting IT spending levels. In the longer-term, generative AI will be incorporated through upgrades to existing software, hardware and services.
