According to a recent research report by leading industry analysts at Canalys, the global total addressable IT market is expected to experience a growth of 3.5 percent in the current year, reaching a staggering $4.7 trillion.
This remarkable growth is occurring despite ongoing economic challenges that have led to cautious spending patterns across various sectors. The research highlights the resilience of the IT industry and its ability to adapt to changing circumstances.
A significant portion of this growth in IT spending is attributed to partner-delivered IT technologies and services, which are forecasted to exceed $3.4 trillion in 2023, accounting for over 70 percent of the total global addressable IT market. This emphasizes the pivotal role played by collaborations and partnerships in driving innovation and business expansion within the IT sector.
Regionally, spending trends vary. North America is predicted to witness a growth rate of 2.8 percent, a notable decrease from the 8.5 percent growth seen in 2022. This decline is attributed to various factors, including a slowdown in cloud service provider capital expenditure during the first half of the year and reduced spending on telecommunications services. Asia Pacific is expected to experience a growth of 4.5 percent, while EMEA and Latin America are projected to grow by 3.4 percent and 3.0 percent, respectively, in 2023.
Key growth areas within the IT sector include cybersecurity, with an expected growth rate of 11.1 percent to reach $79 billion. The increasing demand for safeguarding data, systems, and individuals against emerging threats is driving this expansion. Network infrastructure spending is set to rise by 13.9 percent, reaching $72 billion, primarily due to fulfilling backlogged orders for campus switches and Wi-Fi 6/6e access points. Additionally, cloud application software spending is projected to increase by 19.3 percent to $215 billion, fueled by factors like price increases, subscription renewals, and upselling.
While certain segments, such as servers, storage, and client devices, are predicted to experience negative or stagnant growth due to shifts in demand, AI servers are expected to stand out as a positive outlier.
Canalys Chief Analyst Matthew Ball emphasized that despite challenges such as economic uncertainties, rising interest rates, and extreme weather events, the industry remains poised for growth. He stressed the ongoing significance of digital transformation, cybersecurity, sustainability, and the emergence of generative AI as key drivers of IT services engagement and technological adoption.
Looking ahead, Canalys anticipates a rebound in the industry’s growth in the following year, fueled by increased investments in technology refresh, delayed projects, and new initiatives by businesses and governments worldwide. Initial projections for 2024 indicate a robust growth rate of 6.9 percent, pushing IT spending to reach an unprecedented $5.0 trillion for the first time.
In support of IT vendors’ efforts to comprehend market dynamics, Canalys has introduced an interactive dashboard that provides detailed insights into the total addressable IT market, including technology categories, countries, channels, and end-customer sizes. This tool aims to empower users with a comprehensive understanding of market trends to guide their strategic decisions and planning.
