Despite economic worries, Gartner says IT spending in 2024 will rise 8 percent, but spending on generative AI will not feature
A forecast from a well known analyst house has indicated robust spending on IT in 2024, despite concerns about the state of the global economy.
The forecast in Gartner’s “Market Databook, 3Q23 Update”, predicted that worldwide IT spending will total $5.1 trillion in 2024, an increase of 8 percent from 2023.
One of the most surprising findings in the Gartner forecast, is that despite generative AI (GenAI) hogging news headlines, it has not yet had a material impact on IT spending.
Gartner found instead that investment in AI more broadly is supporting overall IT spending growth.
“In 2023 and 2024, very little IT spending will be tied to GenAI,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “However, organisations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps.”
“The hype around GenAI is supporting this trend, as CIOs recognise that today’s AI projects will be instrumental in developing an AI strategy and story before GenAI becomes part of their IT budgets starting in 2025,” Lovelock said.
The two areas that will see the most IT spending according to Gartner, are the software and IT services segments, will both see double-digit growth in 2024, largely driven by cloud spending.
Indeed, according to Gartner, global spending on public cloud services is forecast to increase 20.4 percent in 2024, and similarly to 2023, the source of growth will be combination of cloud vendor price increases and increased utilisation.
While inflation’s effect on both consumers and businesses plagued the devices market throughout 2022 and 2023, devices spending will begin to rebound modestly in 2024, growing 4.8 percent, Gartner predicted.
Gartner detailed its IT spending breakdown on segmented basis, as follows.
- Spending on data centre systems had risen 4.7 percent in 2023, and is expected to rise to 9.5 percent in 2024;
- Spending on devices had fallen 10 percent in 2023, but will rise 4.8 percent in 2024;
- Spending on software had risen 12.9 percent in 2023 and will rise 13.8 percent in 2024;
- IT services spending had risen 7.3 percent in 2023 and will rise 10.4 percent in 2024;
- Spending on communication services had risen 1.8 percent in 2023 and will rise 3.3 percent in 2024.
Gartner noted that cybersecurity spending is also driving growth in the software segment.
In the 2024 Gartner CIO and Technology Executive Survey, 80 percent of CIOs reported that they plan to increase spending on cyber/information security in 2024, the top technology category for increased investment.
“AI has created a new security scare for organisations,” said Lovelock. “Gartner is projecting double-digit growth across all segments of enterprise security spending for 2024.”
And Gartner also found that ‘change fatigue’ among CIOs is delaying new IT spending, which it said is often manifesting as a hesitation to invest in new projects and initiatives.
This is pushing a portion of 2023’s IT spending into 2024, a trend that is expected to continue into 2025, Gartner predicted.
“Faced with a new wave of pragmatism, capital restrictions or margin concerns, CIOs are delaying some IT spending,” said Lovelock. “Organisations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns.”