The computer industry may be awash in layoffs, but that doesn’t appear to be due to reluctance by information technology buyers to open their wallets.

Gartner Inc. today is forecasting that worldwide IT spending this year will grow 6.8% from 2023 levels, to $5 trillion, more than double the 3.3% growth of the year just concluded. Although the forecast is down from the research firm’s previous 8% growth estimate, it’s the largest spending increase of the past two years.

Despite the hullabaloo over generative artificial intelligence in 2023, IT spending is expected to be driven more by meat-and-potatoes factors such as efficiency, labor and IT services. With 8.7% growth expected this year, IT services sector is now the largest of the five spending categories Gartner tracks, just edging out communication services.

Software spending will maintain its robust growth rate, with an expected 12.7% increase. And despite their image as yesterday’s technology, data center systems should take up a healthy 7.5% on top of 7.1% growth last year.

Worldwide IT Spending Forecast (millions of U.S. dollars) 

Source: Gartner 

Spending on devices will resume its upward trajectory after crashing nearly 9% last year thanks to a glut fueled by pandemic-related PC purchases. The slowest-growing sector is also the second-largest: communication services at 2.3%.

In a statement, Gartner Distinguished Analyst John-David Lovelock said consumer spending on devices and communication services plateaued over a decade ago, but “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,” he said. “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.”

That said, Gartner warned that “change fatigue” could hold back broader IT spending growth as chief information officers balk at signing new contracts and committing to long-term initiatives. Although generative AI has enormous long-term potential, in the near term, “it won’t impact IT spending significantly,” Lovelock said. This will be the year when organizations invest in planning for how to use gen AI, but IT spending will be driven by more traditional forces.”

Image: Pixabay