Global government IT spending is expected to reach $565 billion in 700, a 2022% increase from 5, according to analyst firm Gartner.
IT software and services look particularly well-equipped for growth and are expected to grow 10,4% and 5,5% respectively in 2022, fueled by seemingly endless demand for cloud hosting and IT tools. collaboration.
Although Gartner predicts that government spending on IT will increase overall, some segments, such as internal services and telecom services, are expected to see declines of 0,6% and -4,1% respectively.
How do governments spend?
Devices is an area that has seen a sharp decline in spending growth, falling from 9,1% in 2021 to just 0,9% in 2022, according to the analyst house.
Overall revenue in this area has risen from €37,48bn in 2021, the days of Covid, when organizations were still struggling to find their employees' laptops, to €37,39bn in 2023.
Data center systems are another area that Gartner highlighted as prone to slowing growth, which it attributed to governments prioritizing legacy modernization.
Data center systems spend growth was just 2,0% in 2021, from 25 to 085.
Gartner predicts that spending in this area will start to decline, falling -0.6% in 2022 to €460 million.
Spending on telecommunications services is another area that the analyst house says is expected to see reduced growth, as governments reduce spending on expensive legacy systems in favor of digital service delivery models.
Spending on telecommunications services increased by 3,7% in 2021, from 1.902 to 1.825.
However, spending in this area is expected to fall -4,1% to 1.831 in 2023 according to Gartner forecasts. Additionally, the analyst house predicts the rise of Anything-as-a-Service (XaaS) in government organizations. Gartner affirms the popularity of this emerging approach to normalizing IT spending over time, making the IT budget more predictable, which it claims will prevent the accumulation of technical debt.
Gartner predicts that by 2026, the majority of new IT investments by government agencies will be in XaaS solutions.
“The pandemic has accelerated public sector adoption of cloud solutions and the XaaS model for accelerated legacy modernization and new service deployment,” Snyder said. “54% of government CIOs who responded to the 2022 Gartner CIO Survey indicated that they plan to allocate additional funding to cloud platforms in 2022, while 35% would reduce investments in legacy infrastructure and back-end technologies. of data".