IT Spending Could Top $5Bn in 2024

IT Spending Could Top $5Bn in 2024

After a lacklustre growth in 2023, global IT spends were expected to revive during 2024. However, just three months into the year, market research company Gartner has had to revise its earlier estimates on this front. From an earlier 6% growth, the company now believes that IT spends would grow by 8% to $5.06 trillion. 

So, what happened to all the talk of global economic challenges, low growth in Europe and interest-rate led growth hurdles in the United States and the overall job losses? By the looks of it, the talent gap that enterprises have articulated appears to be worse than they expected and as a result are turning to IT service firms with expertise. 

The growing challenge of talent gap in companies

This trend is pushing consulting spends to outpace internal IT staff investments for the first time, says John-David Lovelock, VP analyst at Gartner, in a statement. In other words, now enterprises are seeking out more consultant-driven technology deployment as part of their efforts to meet business goals. 

Readers may recall that Gartner had earlier predicted the IT market to grow by 6.8% while their revised numbers would actually result in spending crossing $8 trillion before the current decade winds down. “IT services are poised to become the largest market segment we track, with spending expected to surge 9.7% to a staggering $1.52 trillion,” Gartner says.

Amongst the various segments of the industry, data center systems spending is the one where Gartner believes would see the steepest rate of growth – from 4% in 2023 to above 10% in 2024. The upswing is attributed majorly to enterprises planning for generative artificial intelligence (GenAI)-led innovations. 

India could see growth in software spendings

On the Indian IT spends, Gartner believes that the country is poised to witness double-digit year-on-year growth during 2024, though the rate is pegged at 13.2%, which is substantially higher than the global average. Total investments could touch $138.9 billion. The report notes that this growth would be in spite of the slowdown in discretionary spending. 

The report further notes that software spending in the country would grow at its sharpest rate in recent times, touching over 18.5%. “Indian CIOs are continuing to prioritize growth, customer experience, and operational efficiency while leveraging software assets in this challenging environment. Recurring revenue models are playing a significant role in optimizing IT costs and driving software spending,” says the report. 

GenAI and its impact on IT spends

Besides this, the GenAI-led innovative opportunities would be evident in India too though in the short term, revenues generated from these efforts around software would be minimal. The report attributes this trend to the fact that unlike in the West, CIOs in India are still in the planning and evaluation stage. 

At a global level, Gartner believes that companies would shift their focus from planning and strategy to direct implementation over the rest of 2024 and in 2025. “Tech providers are a step ahead, actively integrating genAI capabilities into existing products and services, aligning with use cases identified by their enterprise clients,” says Lovelock.

The report also notes that service providers could enhance their spending in markets that support large-scale GenAI adoption, particularly around servers and semiconductors. Gartner believes that AI servers could account for 60% of the hyperscaler’s spending around servers during the current year. 


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