According to Gartner, Inc.’s latest forecast, worldwide IT expenditures are anticipated to reach $5.26 trillion in 2024, marking a 7.5% increase from the previous year’s $4.89 trillion. This growth projection, though slightly lower than the previous quarter’s 8% estimate, reflects a robust uptick in overall IT spending, up from the previously forecasted $5.06 trillion.
John-David Lovelock, Distinguished VP Analyst at Gartner, highlighted the pervasive impact of Generative AI (GenAI) across various technology sectors, noting its role as a revenue driver primarily benefiting AI model providers. Lovelock likened GenAI’s influence on software spending to a “tax,” attributing revenue gains from GenAI add-ons and tokens back to these providers.
The surge in spending on data center systems is particularly notable, with a projected 24% increase in 2024, significantly higher than the previous quarter’s forecast of 10%. This spike is largely attributed to heightened preparations for GenAI integration, which has substantially heightened compute power demands across data centers.
However, IT services spending growth has been adjusted to 7.1% for 2024, down from the previous forecast of 9.7%, reflecting slower spending in areas such as consulting and business process services.
Lovelock also noted a reduction in “change fatigue” among CIOs, allowing for clearance of contract backlogs from the third quarter of 2023. He anticipates an acceleration in spending towards the year’s end to compensate for a slower start.
Gartner’s methodology for IT spending forecasts relies on comprehensive analysis of vendor sales data and primary research techniques, providing clients with a robust understanding of market dynamics. Clients can access detailed market size data and insights through Gartner’s latest “Gartner Market Databook, 2Q24 Update” and are encouraged to participate in the upcoming webinar and Gartner IT Symposium/Xpo for further insights into industry trends and developments.