Global information technology (IT) spending is forecast to total $5tn in 2024, an increase of 6.8 per cent from 2023, according to new projections by technology research firm Gartner.
The revised forecast is down from Gartner’s previous estimate of 8 per cent growth, a nod to the ongoing economic uncertainty. However, if realised, the 2024 growth rate would still signify a recovery from 2023’s lacklustre 3.3 per cent expansion.
“2024 will be the year when organisations actually invest in planning for how to use generative AI,” said John-David Lovelock, a distinguished vice president analyst at Gartner. “But IT spending will be driven by more traditional forces.”
The fastest-growing segment will be IT services, spanning areas like consulting and outsourcing. Spending is set to rise 8.7 per cent to surpass $1.5tn for the first time next year. This would make it the single largest area of IT expenditure, overtaking telecoms services.
Mr Lovelock explained the shift as enterprises seeking greater efficiency amid difficult trading conditions.
“IT has moved out of the back office, through the front office and is now revenue producing,” he said. “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.”
However, Gartner cautioned that many chief information officers were suffering from “change fatigue”, making them more risk-averse about new initiatives and partners. This would act as an incremental drag on growth.
The new global outlook comes as IT vendors continue to grapple with the potential impact of generative AI tools like ChatGPT, which was released by start-up Anthropic late last year.
Gartner’s methodology draws on sales data from over 1,000 tech providers, in addition to other sources.