Global IT Spending to Reach $5 Trillion in 2024, Gartner Reports

Worldwide IT spending is projected to hit $5 trillion ($4,997,718 million) in 2024, marking a 6.8 percent increase from the previous year, Gartner said in its report.
Gartner forecast on IT spending in 2024This figure represents a slight adjustment from the earlier prediction of an 8 percent growth in the IT industry. Despite the considerable buzz surrounding generative AI (GenAI) in 2023, experts anticipate that it will not significantly impact the immediate trajectory of IT spending.

John-David Lovelock, Distinguished VP Analyst at Gartner, commented on the situation, stating, “While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain, and other big trends we have experienced.”

“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,” John-David Lovelock said.

IT Services Takes the Lead in 2024 Spending

In a notable shift, IT services are poised to become the largest segment of IT spending in 2024, experiencing a growth rate of 8.7 percent. This surge is expected to result in a total expenditure of $1.5 trillion, primarily driven by enterprises investing in projects aimed at enhancing organizational efficiency and optimization. Lovelock emphasized the significance of these investments during a period of economic uncertainty.

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.

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.

Segmented IT Spending Projections for 2024

Spending on Data Center Systems: $261,332 million (+7.5 percent) from $243,063 million in 2023

Spending on Software: $732,287 million (+4.6 percent) from $699,791 million in 2023

Spending on Devices: $1,029,421 million (+12.7 percent) from $913,334 million in 2023

Spending on IT Services: $1,501,365 million (+8.7 percent) from $1,381,832 million in 2023

Spending on Communications Services: $1,473,314 million (+2.3 percent) from $1,440,827 million in 2023

CIOs’ Change Fatigue Impacting IT Spending

The overall growth rate for IT spending in 2023 was modest, standing at 3.3 percent, a mere 0.3 percent increase from 2022. This lackluster performance was largely attributed to change fatigue among Chief Information Officers (CIOs). Momentum is anticipated to rebound in 2024, with an overall IT spending increase of 6.8 percent.

Despite the expected resurgence, the broader IT spending environment remains slightly constrained by change fatigue. This weariness may manifest as resistance to change, leading CIOs to hesitate in signing new contracts, committing to long-term initiatives, or engaging with new technology partners. For the initiatives that do move forward, CIOs are demanding higher levels of risk mitigation and a greater certainty of outcomes.

India IT spending

In 2024, spending on IT services in India is projected to grow 13.4 percent, up from 10.1 percent in 2023. Due to a lack of internal skills, Indian businesses are looking to partner with external providers in areas such as AI, industry cloud, security, and data analytics, resulting in the expected growth of IT services spending in 2024.

Furthermore, devices spending is expected to rebound in 2024 as Indian consumers expect to increase their spending when replacing their mobile phones and other devices this year.

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