Gartner Inc, predicts that worldwide IT (Information Technology) spending will reach a staggering $4.5 trillion in 2023 – An increase of 2.4% from 2022
But hold on to your seats because this news comes with a twist. Despite the previous quarter’s forecast of a 5.1% growth, inflation is continuing to crush consumer purchasing power and send device spending plummeting. It’s a battle of the titans, and the stakes are high!
It’s a testament to the resilience of businesses and their unwavering determination to succeed in the face of adversity. So fasten your seatbelts and get ready for a wild ride in the ever-changing landscape of the IT world!
Distinguished VP Analyst at Gartner, John-David Lovelock says consumers and enterprises are facing very different economic realities.
“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,”
“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.” says Lovelock
The software and IT services segments are poised for explosive growth, projected to surge ahead by a staggering 9.3% and 5.5%, respectively, in the coming year.
.The devices segment is bracing itself for a bitter pill to swallow, with a forecasted decline of 5.1% this year. Both consumers and enterprises are holding their devices close and lengthening their refresh cycles, a sign of the uncertainty and trepidation that permeates the landscape.
Worldwide IT Spending Forecast (Millions of U.S. Dollars)
| 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | |
| Data Center Systems | 212,376 | 12.0 | 213,853 | 0.7 |
| Software | 783,462 | 7.1 | 856,029 | 9.3 |
| Devices | 722,181 | -10.6 | 685,633 | -5.1 |
| IT Services | 1,244,746 | 3.0 | 1,312,588 | 5.5 |
| Communications Services | 1,422,506 | -2.4 | 1,423,367 | 0.1 |
| Overall IT | 4,385,270 | -0.2 | 4,491,471 | 2.4 |
Lovelock says that during the height of the pandemic, employees and consumers had technology refreshes of tablets, laptops and mobile phones due to remote work and education.
“Without a compelling reason for an upgrade, device assets are being used longer and the market is suffering.” he said.
Job vacancy rates are skyrocketing every quarter – Impacts IT Services Spend
The job vacancy rates are skyrocketing every quarter, and the open jobs per unemployed rate has hit an all-time low in many countries. CIOs are waging a fierce battle to find and hire the skilled IT staff they need to keep their companies afloat in these turbulent times.
The competition for talent is fierce, and the stakes are higher than ever before. Companies that lack the requisite talent are struggling to scale and grow, shackled by the weight of their own limitations. It’s a make-or-break moment for the tech industry, and the outcome hangs in the balance.
But wait, there’s more! As if that weren’t enough, the rise of software spend has created a boom in the IT services market. Companies are turning to outside IT staff for implementation and support, desperate to find the expertise they need to survive.
The spending on consulting is expected to reach a mind-boggling $264.9 billion in 2023, a 6.7% increase from the previous year.
According to Lovelock, CIOs are losing the competition for talent and IT services spending is growing faster 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.” he said
Gartner’s approach to forecasting IT spending involves a thorough examination of sales data from more than a thousand vendors offering a wide variety of IT products and services.
The methodology involves a combination of primary research methods and secondary sources, which are used to compile a comprehensive market size database that serves as the foundation for their projections.
The Gartner quarterly IT spending forecast, a beacon of knowledge shining a brilliant light upon the vast and ever-changing landscape of IT expenditures.
