Worldwide government IT spending is forecast to grow at 5 percent to $565.7 billion in 2022, according to a research report from Gartner.
Government IT spending in 2022 is forecast to increase across all segments except internal services and telecom services. Software is forecast to record the strongest growth across all segments in 2022. As legacy modernization continues to be a priority in government organizations, growth in the data center systems segment will continue to slow though the forecast period.
Government IT departments will be spending $26.137 billion (+4.2 percent) in data centers, $37.823 billion (+0.9 percent) in devices, $68.188 billion (–0.1 percent) in internal services, $204.206 billion (+6.5 percent), $162.278 billion (+10.4 percent) in software and $67.102 billion (–3 percent) in telecom services during 2022.
Government IT departments will be spending $26.642 billion (+1.9 percent) in data centers, $37.389 billion (–1.1 percent) in devices, $70.767 billion (–3.8 percent) in internal services, $220.997 billion (+8.2 percent), $183.012 billion (+12.8 percent) in software and $67.193 billion (+0.1 percent) in telecom services during 2023.
Governments continue to invest in critical application software that directly support end user interfaces driving strong growth in this segment. Spending on telecom services is set to decrease in 2022 as governments reduce spending on expensive legacy systems in favor of digital service delivery models.
“The last few years of enduring pandemic challenges have mobilized a wave of digital transformation activities in government organizations across the world,” said Daniel Snyder, director analyst at Gartner. “Governments are executing innovative activities by harnessing technology to streamline digital services, advance automation processes and evolve citizen experiences.”
Anything-as-a-Service (XaaS) is gaining popularity across government organizations as it provides better return on investment normalizing IT spend over time making budgeting for IT more predictable, while avoiding the accrual of technical debt. Gartner predicts that by 2026, most government agencies’ new IT investments will be made in XaaS solutions.
54 percent of government CIOs responding to the 2022 Gartner CIO Survey indicated that they expect to allocate additional funding to cloud platforms in 2022, while 35 percent will decrease investments in legacy infrastructure and data center technologies.
The government IT spending in India is likely to increase 12.1 percent to $9.5 billion in 2022. All IT segments will experience growth in 2022 in India, said Apeksha Kaushik, principal analyst at Gartner.
