According to Gartner, Inc., worldwide IT spending is predicted to reach $5.26 trillion in 2024, a 7.5% increase from 2023. It’s lower than the 8% increase previously forecasted for this year but still higher than the initial prediction of $5.06 trillion.
“Generative AI (GenAI) is impacting all technology segments, though not uniformly beneficially,” said John-David Lovelock, Distinguished V.P. Analyst at Gartner. “Some software spending increases are attributable to GenAI, but to a software company, GenAI most closely resembles a tax. Revenue gains from the sale of GenAI add-ons or tokens flow back to their AI model provider partner.”
Overall IT spending amounted to $4,898,401 million in 2023, reflecting a growth of 3.8%. It is projected to increase by 7.5% to reach $5,267,163 million in 2024.
Spending on data center systems in 2023 was $236098 million, a 4% increase. It is expected to surge by 24.1% in 2024, reaching $293091 million., a substantial increase from the previous quarter’s forecast of 10% growth. This spike is largely driven by the rising need for computing power due to GenAI.
“The compute power demands of GenAI are being strongly felt in data centers, which is reflected in the spending growth in this segment,” Lovelock explained.
In 2023, the spending on devices reached $692,784 million, with a growth rate of -6.5%. The projected growth for 2024 is 5.4%, expected to reach $730,125 million.
Software spending was $974,089 million in 2023, an increase of 11.5% from the previous year. In 2024, it is projected to grow to $1,096,913 million, reflecting a 12.6% increase over the previous year.
In 2023, spending on Communications Services was $1,491,733 million, increasing by 3.2%. In 2024, it is expected to decrease by 3% to $1,537,188 million.
The spending on IT services is $1,503,698 million, with a growth rate of 4.9% in 2023. It is predicted to grow to $1,609,846 million by 7.1% in 2024, which is a decrease from the previous forecast of 9.7%. This slowdown is due to reduced spending in subsegments such as consulting and business process services.
Gartner’s IT spending forecast methodology involves rigorous analysis of sales data from over a thousand vendors, complemented by extensive primary and secondary research. This comprehensive database forms the foundation for Gartner’s market size forecasts.
Also Read: Worldwide IT Spending to Grow 6.8% in 2024: Gartner Forecasts
