Economic uncertainty won’t keep business leaders from spending on their digital transformations, according to Gartner’s latest projection.
Worldwide IT spending is expected to grow 5.5% this year to $4.6 trillion, with growth expected in all regions worldwide.
John-David Lovelock, Gartner distinguished VP analyst, noted that IT spending will remain strong despite high inflation and near-flat GDP growth in many countries this year.
“Prioritization will be critical as CIOs look to optimize spend while using digital technology to transform the company’s value proposition, revenue and client interactions,” said Lovelock in a statement.
Not all categories are expected to grow: While an increased focus on productivity and automation will fuel software into double-digit growth, devices are expected to sink 5% thanks to a lack of purchase incentives from consumers, Gartner said.
IT services, meanwhile, will grow 9.1% this year and 10.2% in 2024, primarily propelled by the infrastructure-as-a-service market, which Gartner pegs to to reach over 30% growth this year.
A recent CGT survey that focused specifically on collaboration technologies found that one-quarter of consumer goods organizations were either investing or planned to invest within the next year in their collaboration tech for their IT functions.
Within cloud services, price is a key driver for the very first time, the firm noted, instead of just increased usage.
Similarly, today’s tech leaders will continue to face tough decisions about whether to maintain or upgrade their tech stacks, and their impact on the business is unsurprisingly a key deciding factor.
“CIOs face a balancing act that is evident in the dichotomies in IT spending,” said Lovelock. “For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services.”
The firm also noted that there remains a critical shortage of skilled IT labor, with demand expected to surpass supply until at least 2026.
“Tech layoffs do not mean that the IT talent shortage is over,” said Lovelock. “IT spending on internal services is slowing in all industries, and enterprises are not [keeping] up with wage rate increases. As a result, enterprises will spend more money to retain fewer staff and will turn to IT services firms to fill in the gaps.”