IT software and services will drive global IT spending to $XNUMX trillion in XNUMX, a XNUMX% increase from XNUMX, according to the latest forecast from market research firm Gartner. . That's down from last quarter's XNUMX% growth estimate, primarily due to a slower-than-expected rebound in hardware sales.

Business spending on software and IT services is expected to grow XNUMX% and XNUMX% respectively in XNUMX. However, following the trend of the preceding forecasts, spending on hardware devices is expected to fall XNUMX% this year, and users and companies will expand device upgrades. cycles

Otherwise, business spending on data center systems and communications services is expected to rise slightly, at XNUMX% and XNUMX%, respectively.

Since Russia's invasion of Ukraine, there have been no major surprises in the economy, with central banks and companies responding largely as expected to the current inflationary economic climate, said John-David Lovelock, a Gartner vice president and analyst. However, while he said Gartner expected device spending to slow due to the impact of inflation on users' purchasing power, the upgrade cycle was even longer than expected.

"People learn that they can hold a device longer and still be satisfied," Lovelock said, noting that this trend is expected to continue until XNUMX and XNUMX, when Gartner expects a portion of accumulation of purchases.

However, unless devices, especially phones, are seen as offering new levels of functionality or a genuine reason to upgrade, he cautions that device sales could remain flat for some time to come.

Enterprise cloud spending is locked in

While users have been hit hard by inflation, Lovelock said a lot of spending on the enterprise side is locked in and recurring, especially in managed services, cloud, Software as a Service, PaaS, and telecommunications.

"Each and all of those things are locked into a longer-term contract," he said. "Even servers, network or storage equipment: ordered last year for delivery this year."

And while Gartner doesn't give a breakdown of security spending in its IT spending forecast, Lovelock also thinks security spending will continue to rise as companies rethink their approach to securing their environment.

The IT services market is also experiencing a period of development as companies look to hire outside IT staff for implementation and support. For example, Gartner forecasts that consulting spending will reach $XNUMX million in XNUMX, an increase of XNUMX% from XNUMX.

Despite the ongoing and widespread layoffs that technology companies are experiencing today, many job cuts have involved non-technical staff. In addition to this, according to a research conducted by Skillsoft in November 3, around XNUMX quarters of IT decision makers across the globe stated that they face critical skill gaps in IT departments.

Lovelock said CIOs are losing the battle for talent, which means that across every industry, spending on IT services is growing faster than internal services. As a result, qualified IT professionals are migrating from the company to technology and service providers who can meet growing salary demands, development opportunities and career prospects.

As a turbulent economy has altered the landscape for business decisions and caused CIOs to be more hesitant, delay decisions or reorder priorities, Lovelock said IT spending appears to be inflation-proof.

Copyright © two thousand twenty-three IDG Communications, Inc.

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