Worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8% from 2023, according to the latest forecast by Gartner. While generative AI (GenAI) had significant hype in 2023, Gartner does not expect it to have major impact in the near-term.
“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “2024 will be the year when organizations actually invest in planning for how to use GenAI, however IT spending will be driven by more traditional forces, such as profitability, labor, and dragged down by a continued wave of change fatigue.”
IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time, according to the report. Spending on IT services is expected to grow 8.7% in 2024, reaching $1.5 trillion. This is largely due to enterprises investing in organizational efficiency and optimization projects which will be crucial during this period of economic uncertainty.
“Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growth,” said Lovelock. “Enterprises continue to find more uses for technology – IT has moved out of the back office, through the front office and is now revenue producing, 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.”
The overall IT spending growth rate for 2023 was 3.3%, only a 0.3% increase from 2022. This was largely due to change fatigue among CIOs. Gartner says momentum will regain in 2024, with overall IT spending increasing 6.8%.
Even with the expected regained momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue. Change fatigue could manifest as change resistance — with CIOs hesitating to sign new contracts, commit to long-term initiatives or take on new technology partners. For the new initiatives that do get launched, CIOs require higher levels of risk mitigation and greater certainty of outcomes.
The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 4Q23 Update.”
This data will help channel partners to measure their results relative to Gartner’s projections for the coming year.