Global IT expenditure is anticipated to reach $5 trillion in 2024, up 6.8% from 2023, according to the most recent Gartner prediction. This is less than the 8% rise predicted for the previous quarter. While generative AI (GenAI) had significant hype in 2023, it will not significantly change the growth of IT spending in the near-term.
By 2024, IT services will have grown to become the biggest category of IT expenditure for the first time. It is anticipated that in 2024, spending on IT services would increase by 8.7% to $1.5 trillion. This is largely due to enterprises investing in organizational efficiency and optimization projects. These investments would be crucial during this period of economic uncertainty.
“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “2024 will be the year when organizations actually invest in planning for how to use GenAI, however IT spending will be driven by more traditional forces, such as profitability, labor, and dragged down by a continued wave of change fatigue.”
IT Spending Continues to Be Affected by CIOs’ Change Fatigue
In 2023, the total growth rate of IT expenditure was 3.3%, indicating a marginal rise of 0.3% from 2022. CIOs’ weariness with change was a major factor in this. In 2024, momentum will return and total IT expenditure will rise by 6.8%.
Change weariness is still a minor restraint on the overall IT investment environment, even with the anticipated rebound in 2024. CIOs may exhibit change resistance due to exhaustion from change, making them reluctant to sign new contracts, commit to long-term projects, or work with new technology partners. CIOs need more outcomes assurance and better degrees of risk mitigation for the new projects that are implemented.
Gartner’s Research Method
“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” said John-David Lovelock, Distinguished VP Analyst at Gartner.The approach used by Gartner to anticipate IT expenditure is largely dependent on a thorough examination of the sales of more than a thousand suppliers covering the full spectrum of IT goods and services. Gartner creates a comprehensive database of market size data to support its projection by using primary research approaches in conjunction with secondary research sources.
Across the hardware, software, IT services, and telecommunications areas, the Gartner quarterly IT expenditure estimate would offer a distinctive viewpoint on IT spending. Gartner customers may better grasp market possibilities and challenges with the aid of these studies.
“Adoption rates among consumers for devices and communications services plateaued over a decade ago. Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growths, so being surpassed by software and services was inevitable,” added Mr. Lovelock. “Enterprises continue to find more uses for technology - IT has moved out of the back office, through the front office and is now revenue producing, until there is a plateau for how and where technology can be used in an enterprise, there cannot be a plateau in enterprise IT spending.”
