The respected analyst firm Gartner Inc. said today in its latest forecast that worldwide information technology is expected to top $4.4 trillion in 2022, rising by 4% from the year before.

Gartner Distinguished Research Vice President John-David Lovelock said 2022 is already proving to be one of the “noisiest years on record” for chief information officers, what with inflation, currency fluctuations and geopolitical disruption adding to the existing supply chain challenges that have persisted since the COVID-19 pandemic began.

“Yet contrary to what we saw at the start of 2020, CIOs are accelerating their IT investments as they recognize the importance of flexibility and agility in responding to disruption,” Lovelock said. “As a result, purchasing and investing preference will be focused in areas including analytics, cloud computing, seamless customer experiences and security.”

One of the reasons for the increased spending forecast is that technology service providers are raising their prices. Gartner says that reflects a dearth of IT talent that’s forcing tech companies to pay more competitive salaries, and those costs are being passed on to buyers. As a result, software spending could rise by 9.8% this year, to $674.9 billion, while IT services spending will grow by 6.8%, to $1.3 trillion.

Gartner said software spending is also being driven by digital transformation and the growing prominence of enterprise application software, infrastructure software and managed services. It noted that cloud infrastructure-as-a-service powers virtually every major consumer-focused online offering and mobile app. These trends will account for a significant amount of spending growth.

Software spending will likely make up for sluggish growth elsewhere in the industry. Gartner’s forecast shows that the hunger for new laptops and tablets that was spurred by the pandemic has finally abated. Devices spending is forecast to rise by only 1.9% this year, to $824.6 billion.

Spending on communications services, meanwhile, is expected to remain flat, albeit very significant, at $1.4 trillion. Data center systems will continue to attract more investment though, with spending there expected to rise by 5.5% to $218.6 billion.

Interestingly, Gartner believes that Russia’s invasion of Ukraine will not have much of a direct impact on global IT spending. Rather, it said price and wage inflation will be the biggest impingements to CIOs’ plans, together with the tech talent shortages and supply chain uncertainties that continue to dog many suppliers.

Still, Lovelock is optimistic that most CIOs anticipate having the financial and organizational ability required to invest in key technologies, both in 2022 and 2023.

“Some IT spending was on hold in early 2022 due to the Omicron variant and subsequent waves but is expected to clear in the near-term,” the analyst stated. “CIOs who keep their eye focused on key market signals, such as the shift from analog to digital business and buying IT to building it, as well as negotiate with their vendor partners to assume ongoing risks, will fare better in the long term. At this point, only the most fragile companies will be forced to pivot to a cost-cutting approach in 2022 and beyond.”

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