IT spending to grow 2.4% to $4.5 trillion in 2023: Gartner

IT spending is projected to increase 2.4 percent to $4.5 trillion in 2023 from 2022, according to the latest forecast by Gartner.
VC funding for techGrowth in IT spending on Data Center Systems will be 0.7 percent to $213.853 billion in 2023.

Growth in spending on software will be 9.3 percent to $856.029 billion in 2023.

Spending on devices will drop 5.1 percent to $ 685.633 billion in 2023.

Spending on IT services will be 5.5 percent to $1,312.588 billion in 2023.

Growth in spending on communication services will be 0.1 percent to $1,423.367 billion in 2023.

“While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown,” John-David Lovelock, Distinguished VP Analyst at Gartner, said.

“A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities. We’ve seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof.”

The software and IT services segments are projected to grow 9.3 percent and 5.5 percent in 2023, respectively. The devices segment is forecast to decline 5.1 percent this year as both consumers and enterprises lengthen device refresh cycles

Job vacancy rates have been increasing every quarter and the open jobs per unemployed rate is at record lows in many countries. High competition for talent is challenging CIOs to hire skilled IT staff, limiting growth for companies who struggle to scale without the requisite talent.

Simultaneously as software spend continues to rise, the IT services market is growing as companies look to bring in outside IT staff for implementation and support. For example, spending on consulting is expected to reach $264.9 billion in 2023, a 6.7 percent increase from 2022.

“CIOs are losing the competition for talent,” said Lovelock. “IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects.”