Gartner Forecasts Worldwide IT Spending to Grow 8% in 2024
Worldwide IT spending is expected to
total $5.06 trillion in 2024, an increase of 8% from 2023, according to the
latest forecast by Gartner, Inc. This is an increase from the previous
quarter’s forecast of 6.8% growth and puts worldwide IT spending on track to
surpass $8 trillion well before the end of the decade.
“With spending on IT services on
track to grow by 9.7% to eclipse $1.52 trillion, this category is on pace to
become the largest market that Gartner tracks,” said John-David Lovelock, Distinguished VP Analyst
at Gartner. “Enterprises are quickly falling
behind IT service firms in terms of attracting talent with key IT skill sets.
This creates a greater need for investment in consulting spend compared to
internal staff. We are at an inflection year for this trend, with more money
being spent on consulting than internal staff for the first time.”
Data Center Systems Investment
Illustrates Shift in Focus to GenAI Spending
Spending on data center systems is
expected to see a notable jump in growth from 2023 (4%) to 2024 (10%), in large
part due to planning for generative AI (GenAI)
(See Table 1).
“We are seeing a cycle of story,
plan, execution when it comes to GenAI. In 2023, enterprises were telling the
story of GenAI and in 2024 we are seeing most of them planning for
eventual execution in 2025,” said Lovelock. “Technology providers are required
to be a step ahead of this cycle and are already in the execution phase. They
are bringing GenAI capabilities to existing products and services, as well as
to use cases being identified by their enterprise clients.
“There is also gold rush level spending
by service providers in markets supporting large scale GenAI projects, such as
servers and semiconductors,” said Lovelock. “In 2024, AI servers will account
for close to 60% of hyperscalers total server spending.”
In 2024, software spending in India
is projected to record the highest growth rate of 18.6%. 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. Additionally, Gen AI is bringing a renewed sense
of optimism by unlocking new opportunities for growth and innovation.
However, in the short term, the revenue generated from Gen AI in the
software industry will be minimal, as Indian CIOs are currently in the planning
and evaluation stage.
Furthermore, devices spending is
expected to jump from -2.1% in 2023 to 16.9% in 2024. This is mainly because
Indian consumers expect to increase their spending when replacing their mobile
phones and other devices this year.
Devices Expected to Bounce Back in 2024
The average lifespan for mobile phones
is shortening and consumers and enterprises are replacing mobile phones
earlier. This change allows device spending to achieve $688 billion in spending
during 2024, up from 2023 spending lows of $664 billion, which will represent a
3.6% growth rate. The integration of GenAI capabilities in
premium and basic phones sustains, more than drives, this change.
Gartner’s IT spending forecast
methodology relies heavily on rigorous analysis of the sales by over a thousand
vendors across the entire range of IT products and services. Gartner uses
primary research techniques, complemented by secondary research sources, to
build a comprehensive database of market size data on which to base its
forecast.
The Gartner quarterly IT spending
forecast delivers a unique perspective on IT spending across the hardware,
software, IT services and telecommunications segments. These reports help
Gartner clients understand market opportunities and challenges. The most recent
IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 1Q24
Update.”
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