Gartner Forecasts Worldwide IT Spending to Develop 6.8% in 2024

• Spending on IT Companies to Surpass Communications Companies Spending for the First Time in 2024

Worldwide IT spending is anticipated to whole $5 trillion in 2024, a rise of 6.8% from 2023, in line with the most recent forecast by Gartner, Inc. That is down from the earlier quarter’s forecast of 8% development. Whereas generative AI (GenAI) had important hype in 2023, it is not going to considerably change the expansion of IT spending within the near-term.

“Whereas GenAI will change every part, it received’t affect IT spending considerably, just like IoT, blockchain and different massive traits we have now skilled,” mentioned John-David Lovelock, Distinguished VP Analyst at Gartner. “2024 would be the yr when organizations truly put money into planning for the way to use GenAI, nonetheless IT spending will probably be pushed by extra conventional forces, corresponding to profitability, labor, and dragged down by a continued wave of change fatigue.”

IT Companies Turns into Largest Phase of IT Spending in 2024

IT companies will proceed to see a rise in development in 2024, turning into the biggest phase of IT spending for the primary time. Spending on IT companies is anticipated to develop 8.7% in 2024, reaching $1.5 trillion (see Desk 1). That is largely resulting from enterprises investing in organizational effectivity and optimization tasks. These investments will probably be essential throughout this era of financial uncertainty.

“Adoption charges amongst customers for units and communications companies plateaued over a decade in the past. Client spending ranges are primarily pushed by worth modifications and substitute cycles, leaving room for less than incremental growths, so being surpassed by software program and companies was inevitable,” mentioned Lovelock. “Enterprises proceed to search out extra makes use of for know-how – IT has moved out of the again workplace, by means of the entrance workplace and is now income producing, till there’s a plateau for a way and the place know-how can be utilized in an enterprise, there can’t be a plateau in enterprise IT spending.”

Desk 1. Worldwide IT Spending Forecast (Thousands and thousands of U.S. {Dollars}) 

Supply: Gartner (January 2024)

CIOs’ Change Fatigue Continues to Affect IT Spending

The general IT spending development price for 2023 was 3.3%, solely a 0.3% improve from 2022. This was largely resulting from change fatigue amongst CIOs. Momentum will regain in 2024, with total IT spending growing 6.8%.

Even with the anticipated regained momentum in 2024, the broader IT spending surroundings stays barely constrained by change fatigue. Change fatigue may manifest as change resistance — with CIOs hesitating to signal new contracts, decide to long-term initiatives or tackle new know-how companions. For the new initiatives that do get launched, CIOs require greater ranges of threat mitigation and larger certainty of outcomes.

Gartner’s IT spending forecast methodology depends closely on rigorous evaluation of the gross sales by over a thousand distributors throughout your entire vary of IT services. Gartner makes use of main analysis methods, complemented by secondary analysis sources, to construct a complete database of market dimension information on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a novel perspective on IT spending throughout the {hardware}, software program, IT companies and telecommunications segments. These stories assist Gartner purchasers perceive market alternatives and challenges. The latest IT spending forecast analysis is obtainable to Gartner purchasers in “Gartner Market Databook, 4Q23 Replace.”