The analyst company, Gartner, has predicted that worldwide IT spending will increase in 2023 by 4.3% to $4.7 trillion. Pretty worryingly, the analyst said that Chief Information Officers (CIOs) are losing the competition for IT talent so are increasing spending on technologies that enable automation and efficiency to drive growth with few employees.
Interestingly, generative AI has been held up as some type of harbinger of doom, but right now, spending on generative AI has not yet significantly impacted IT spending levels. Communications Services made up the biggest proportion of the spending coming in at $1.46 trillion.
Discussing how companies are changing their spending habits, John-David Lovelock, Distinguished VP Analyst at Gartner, said:
‘Digital business transformations are beginning to morph. IT projects are shifting from a focus on external facing deliverables such as revenue and customer experience, to more inward facing efforts focused on optimization.’
The growth in spending is buoyed by enterprise IT spending but devices spending is going to fall 8.6% in 2023 due to inflation hurting consumer purchasing power.
Below is a table showing the different categories contained within IT spending along with the forecasted spending and growth in spending:
| 2023 Spending | 2023 Growth (%) | |
| Data Center Systems | 217,880 | -1.5 |
| Devices | 700,023 | -8.6 |
| Software | 911,663 | 13.5 |
| IT Services | 1,420,905 | 8.8 |
| Communications Services | 1,461,662 | 2.7 |
| Overall IT | 4,712,133 | 4.3 |
Commenting on generative AI and spending on it, Lovelock said:
‘Generative AI’s best channel to market is through the software, hardware and services that organizations are already using. Every year, new features are added to tech products and services as add-ons or upgrades."
"Most enterprises will incorporate generative AI in a slow and controlled manner through upgrades to tools that are already built into IT budgets. When it comes to AI this year, organizations can thrive without having AI in production but they cannot be without a story and a strategy.’
Gartner said its forecast looks at the sales of thousands of vendors to try to make it accurate, however, it still is just a forecast and reality could deviate from these predictions.
Source: Gartner