5.1 percent increase in IT spending from Gartner

5.1 percent increase in IT spending from Gartner

Enterprise IT spending expected to shed fears about global economic recession, with growth forecast by Gartner

There won’t be a cut in IT budgets next year, but in fact, there is healthy growth in enterprise IT spending, one analyst predicted.

Gartner pointed out that IT spending could be due to recession resistance, then Climate forecast Global IT spending will grow by 5.1% in 2023.

Good news prediction is in place Noticeable contrast to me Precautions Taken by Big name tech companies. Last week for example, Microsoft confirmed the existence of a file Second round of job cutsReportedly, fewer than 1,000 of their P45s were delivered.

Spending forecast

However, Gartner forecasts worldwide IT spending to grow to a total of $4.6 trillion in 2023, an increase of 5.1 percent from 2022.

The demand for information technology in 2023 is expected to be strong as companies move forward with digital business initiatives in response to the economic turmoil.

“Enterprise IT spending is stagnant as CEOs and CFOs, rather than cutting IT budgets, increase spending on digital business initiatives,” said John David Lovelock, senior vice president analyst at Gartner.

“The economic disruption will change the context for technology investments, increase spending in some areas and accelerate declines in others, but it is not expected to have a material impact on the overall level of enterprise technology spending,” Lovelock said.

But Lovelock warned device makers like Apple, which recently raised iPhone and iPad prices dramatically outside its home market in the United States, that consumer spending has been hit by inflationary pressures.

“Inflation has reduced the purchasing power of consumers in nearly every country around the world,” Lovelock warned. “Consumer purchasing power has been reduced to the point that many consumers are now delaying the purchase of devices for 2022 until 2023, which has reduced spending on devices by 8.4% in 2022 and 0.6% in 2023.”

Gartner said the technologies that maintain versus those that drive the business are evident from their projected growth rates in 2023.

She said there is enough spending within data center markets to maintain existing on-premises data centers, but new spending continues to shift to cloud options, as evidenced by the 11.3 percent projected growth of software spending in 2023.

growth sectors

Gartner forecast that global IT spending will rise 3.4% for data center systems. It will rise 11.3 percent for software; It will decrease 0.6 percent for devices; It will rise by 7.9 percent for IT services; It will rise 2.4 percent for telecom services.

In summary, Gartner forecast public IT spending to rise 5.1% in 2023.

The analysts house said organizations will continue to protect efficiency-driven digital investments.

“In a deteriorating or declining economy, conventional wisdom calls for lower costs, including IT costs,” Gartner said. However, a July 2022 Gartner survey of more than 200 CFOs found that 69 percent plan to increase their spending on digital technologies, while the 2023 Gartner CIO and Technology Executive Survey found that CIOs are tasked with accelerating the time to capitalize on investments. digital.”

“Companies will primarily use digital technology to reshape their revenue stream, add new products and services, change the cash flow of existing products and services, as well as change the value proposition of existing products and services,” Lovelock said.

“This trend has fueled the shift from technology procurement to building, composing and assembling technology to meet specific business drivers,” Lovelock said. “This shift is the basis for cloud growth on the premises level for new IT spending.”

“However, as organizations also look to achieve process efficiencies, reduce costs and/or avoid cost during the current economic uncertainty, more traditional back office and operational needs of departments outside of IT are being added to the list of transformation projects,” Lovelock said. digital”.

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