Good news for tech suppliers, after worldwide IT spending is forecasted by Gartner to grow 7.4 percent in 2024
Worldwide IT spending is to reach $5.26 trillion in 2024, marking a 7.5 percent increase from 2023, analyst house Gartner has predicted.
The latest prediction of worldwide growth in IT spending was helping by heavy data centre spending thanks to generative AI, and also a more modest but significant growth in spending on software.
However, the projected 7.5 percent increase in IT spending in 2024 is a decrease from the 8 percent rise that had been forecasted for 2024 by Gartner late last year, but is an increase of previous spend forecast of $5.06 trillion.
IT spending
Gartner said that a noteworthy trend is the impact of Generative AI (GenAI) across technology segments.
While some software spending increases are attributable to GenAI, it is likened to a “tax” for software companies, with revenue from GenAI add-ons largely benefiting AI model providers, said the analyst house.
Significant growth is anticipated in data centre systems, with spending expected to surge by 24 percent in 2024, up from the previous forecast of 10 percent. This surge is driven by the increasing compute power demands of GenAI, said Gartner.
“Generative AI (GenAI) is being felt across all technology segments and subsegments, but not to everyone’s benefit,” said John-David Lovelock, Distinguished VP Analyst at Gartner.
“Some software spending increases are attributable to GenAI, but to a software company, GenAI most closely resembles a tax. Revenue gains from the sale of GenAI add-ons or tokens flow back to their AI model provider partner.”
John-David Lovelock, distinguished VP analyst at Gartner. Image credit Gartner
“The compute power needs of GenAI are being felt across the data centre, and spending in that segment reflects this ravenous demand,” said Lovelock.
Sector breakdown
Besides the forecast 24 percent rise in ‘data centre’ spending, Gartner also predicted a 5.4 percent growth in ‘device’ spending; a 12.6 percent growth in ‘software’ spending; a 7.1 percent growth in ‘IT services’ spending; and a 3 percent growth in ‘communication services’ spending.
Gartner also flagged a spending rush towards the end of the year, and it also noted that the ‘change fatigue’ among CIOs it had previously flagged which had been delaying new IT spending, is now easing.
“The change fatigue in CIOs that we saw at the start of the year has now abated and the contract backlogs going back to the third quarter of 2023 are being cleared,” said Lovelock. “We expect to see a larger rush towards the end of the year to make up for the slow start.”
