This year, spending on IT services will exceed spending on telecommunications services for the first time
O Gartner, a world leader in research and advice for businesses, predicts that global IT spending will total $5 trillion in 2024, representing an increase of 6.8% compared to 2023. This amount is lower than the previous quarter's forecast that indicated growth of 8%. Although Generative Artificial Intelligence (GenAI) has had a hype notable in 2023, it will not significantly change IT spending growth in the near term.
“While GenAI will change everything, this technology will not have a significant impact on IT spending, similar to IoT, Blockchain and other big trends we have experienced,” says John-David Lovelock, Vice President and Analyst at Gartner. “2024 will be the year that companies really invest to plan for the use of GenAI, but IT spending will be driven by more traditional forces such as profitability, labor and dragged by an ongoing wave of resistance to change.”
IT services become the largest expense segment in 2024: IT services will continue to grow in 2024, becoming, for the first time, the largest segment of information technology spending. Gartner predicts that spending on IT services is expected to grow by 8.7% in 2024, reaching $1.5 trillion. This is largely due to the fact that companies invest in organizational efficiency and optimization projects. Analysts estimate that these investments will be crucial during the period of economic uncertainty.
“Adoption rates among consumers for telecommunications devices and services have stagnated for more than a decade. Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room only for incremental growth. As a result, being overtaken by software and services was inevitable,” said Lovelock. “Companies continue to find more uses for technology. IT left the back office, passed to the front office and now it is generating revenue. Until there is a definition of how and where technology can be used in a company, there cannot be a level in corporate IT spending.”
Forecasting global IT spending
(In millions of US dollars)
CIO (Chief Information Officer) Resistance to Change Continues to Affect IT Spending: The global IT expense growth rate for 2023 was 3.3%, which represents an increase of just 0.3% from 2022. This is largely due to CIOs' resistance to change. Momentum will recover in 2024, with an estimated 6.8% increase in IT overheads.
Gartner's IT spend forecasting methodology relies heavily on rigorous analysis of sales made by more than a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to create a comprehensive market size database on which to base its forecasts.
Gartner's quarterly IT spending forecast offers a unique perspective on IT spending across hardware, software, IT services and telecommunications. These reports help Gartner clients understand market opportunities and challenges. The latest IT spending forecast research is available to Gartner clients at “Gartner Market Databook, 4Q23 Update“. Gartner for High Tech equips technology leaders and their teams with role-based best practices, industry insights, and strategic insights into emerging trends and market shifts so they can achieve their critical priorities and build their best-in-class organizations. success. Additional information is available at www.gartner.com/en/industries/
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