Worldwide IT spending is anticipated to reach a total of $5.1 trillion or $5,069.773 billion in 2024, marking an 8 percent increase from the previous year, according to the latest forecast by Gartner.
What is growing?
Spending on data center systems will grow 9.5 percent to $260.221 billion.
Spending on devices will increase 4.8 percent to $722.472 billion.
Spending on software will surge 13.8 percent to $1,042.286 billion.
Spending on IT services will grow 10.4 percent to $1,547.349 billion.
GenAI’s Current Influence on IT Spending:
The report highlights the limited impact of generative AI (GenAI) on IT spending, with investment in broader AI technologies driving the overall growth.
John-David Lovelock, Distinguished VP Analyst at Gartner, stated that in 2023 and 2024, GenAI will not significantly influence IT spending. However, organizations continue to invest in AI and automation to enhance operational efficiency and bridge IT talent gaps. The anticipation surrounding GenAI is bolstering this trend, as CIOs acknowledge that present AI projects will play a crucial role in formulating an AI strategy before GenAI becomes a significant part of IT budgets, starting in 2025.
Key Growth Segments:
The software and IT services segments are expected to experience double-digit growth in 2024, primarily propelled by increased cloud spending. Global spending on public cloud services is projected to surge by 20.4 percent in 2024, fueled by a combination of cloud vendor price hikes and heightened utilization.
After facing challenges due to inflation in 2022 and 2023, devices spending is forecasted to rebound modestly, with a growth of 4.8 percent in 2024. Furthermore, cybersecurity spending is a notable driver of growth in the software segment, with 80 percent of CIOs planning to increase investments in cybersecurity in 2024.
The AI Security Concern:
Lovelock noted that AI has introduced a new security concern for organizations, leading to a double-digit growth projection across all segments of enterprise security spending for 2024.
CIOs’ Change Fatigue and Its Impact:
Change fatigue among CIOs is impacting new IT spending, causing a delay in initiating fresh projects and initiatives. This delay has shifted a portion of 2023’s IT spending into 2024, a trend expected to continue into 2025. CIOs are prioritizing cost control, efficiency, and automation in IT projects due to capital constraints, margin concerns, and a wave of pragmatism.
The report from Gartner sheds light on the evolving landscape of IT spending, highlighting the influential factors shaping the trajectory of the industry in 2024. Despite the minimal immediate impact of GenAI on spending, the growth in AI investments signifies a pivotal shift in how organizations leverage technology to enhance operations and security.