Worldwide IT Spending In 2023 To Grow 4.3%, Total $4.7 Trillion: Gartner

Worldwide IT spending is projected to total $4.7 trillion in 2023, an increase of 4.3% from 2022, according to the latest forecast by Gartner. As CIOs continue to lose the competition for IT talent, they are shifting spending to technologies that enable automation and efficiency to drive growth at scale with fewer employees, Gartner said in its release.

“Digital business transformations are beginning to morph,” said John-David Lovelock, vice president and distinguished analyst at Gartner. “IT projects are shifting from a focus on external-facing deliverables such as revenue and customer experience, to more inward-facing efforts focused on optimisation,” he said.

According to Gartner, the software segment will see a double-digit growth of 13.5% in 2023 as organisations increase utilisation and reallocate spending to core applications and platforms that support efficiency gains such as enterprise resource planning and customer relationship management applications. Vendor price increases will also continue to bolster software spending through this year.

Spending on IT services and communications services is expected to grow by 8.8% and 2.7%, respectively. While the overall outlook for enterprise IT spending is positive, spending on devices will decline by 8.6% in 2023 due to the ongoing impact of inflation on consumer purchasing power.

“The devices segment is experiencing one of its worst growth years on record. Even as inflation eases slightly in some regions, macroeconomic factors are still negatively impacting discretionary spending and lengthening device refresh cycles. Devices' spending is not expected to recover to 2021 levels until at least 2026,” said Lovelock.

Enterprises Will Incorporate Generative AI Through Existing Tools

The Gartner forecast shows that while generative artificial intelligence is at the top of the mind for many businesses and IT leaders, it is not yet significantly impacting IT spending levels. In the longer term, generative AI will primarily be incorporated into enterprises through existing spending. 

“Generative AI’s best channel to market is through the software, hardware and services that organisations are already using,” said Lovelock. “Most enterprises will incorporate generative AI in a slow and controlled manner through upgrades to tools that are already built into IT budgets.”

“When it comes to AI this year, organisations can thrive without having AI in production but they cannot be without a story and a strategy,” said Lovelock.