Gartner Projects Worldwide IT Spending To Grow 6.8% In 2024

Gartner, a research and consulting firm, lowered its global IT spending projection due to a continued wave of change fatigue.

Worldwide spending on information technology may grow 6.8% to $5 trillion in 2024, according to a forecast by Gartner. This is down from the previous quarter’s forecast of 8% growth.

While generative artificial intelligence had significant hype in 2023—similar to past trends such as the internet of things and blockchain—it will not significantly change the growth of IT spending in the near term, Gartner said.

“2024 will be the year when organisations actually invest in planning for how to use Gen AI; however, IT spending will be driven by more traditional forces, such as profitability and labour, and dragged down by a continued wave of change fatigue,” said John-David Lovelock, distinguished vice president-analyst at Gartner.

IT Services To Be Largest Segment Of IT Spending In 2024

IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time. Spending on IT services is expected to grow 8.7% in 2024, reaching $1.5 trillion. This is largely due to enterprise investments in organisational efficiency and optimisation projects, which will be crucial during the current period of economic uncertainty.

Spending on IT services will surpass communications services spending, which is expected to grow 2.3% to reach $1.47 trillion, according to Gartner. The other major spending will be software, which is expected to rise 12.7% and cross $1 trillion.

“Adoption rates among consumers for devices and communications services plateaued over a decade ago. Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growth, so being surpassed by software and services was inevitable,” said Lovelock.

“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. 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,” Lovelock added.

CIOs’ Change Fatigue To Impact IT Spending

The overall IT spending growth rate for 2023 was 3.3%, only a 0.3% increase from 2022. This was largely due to change fatigue among chief information officers. Momentum will regain in 2024, with overall IT spending increasing by 6.8%, Gartner forecasts.

Even with the expected momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue. CIOs might hesitate to sign new contracts, commit to long-term initiatives, or take on new technology partners. For the new initiatives that do get launched, CIOs require higher levels of risk mitigation and greater certainty of outcomes, Gartner said.