IT spending set to stay strong despite global economic worries

Worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.1% from 2022, according to the latest forecast by Gartner.

The analyst house expects enterprises to “push forward with digital business initiatives”, despite economists worldwide predicting a potential recession on the horizon.

Economists from the IMF, to take just one example, have predicted an “increasingly gloomy and uncertain outlook”, with baseline international economic growth forecast to slow from 6.1% in 2021, to 3.2%  in 2022, and just 2.9% in 2023.

Where will spending rise most?

Gartner warns that not all sectors are set for equal growth, spending on devices is likely to be the worst performer of all the IT segments looked at. 

The analyst house predicted that spending on devices will drop -0.6 to $735,394m in 2023, a stark decline from the 15.8% growth recorded in 2021.

The software market looks set to be the strongest performing IT segment, growing 11.3% in 2023 to $879,625m, which the firm attributed to the “shift to cloud options”.

The software segment’s impressive performance could relate to the continued demand for tools enabling video conferencing and remote collaboration post-pandemic. 

IT services are set to be the 2nd best-performing segment, growing 7.9% in 2023 to $1,357,914 millio in 2022.

Data center systems and communications services are also primed for solid growth if Gartner’s statistics are to be believed, with 3.4% and 2.4% growth predicted respectively in those areas.

“Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others, but it is not projected to materially impact the overall level of enterprise technology spending.”

“However, inflation has cut into consumer purchasing power in almost every country around the world. Consumer purchasing power has been reduced to the point that many consumers are now deferring 2022 device purchases until 2023, driving spending on devices down 8.4% in 2022 and 0.6% in 2023.”

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