Gartner has cut its forecast for growth in worldwide IT spending by more than 50% from just a few months ago. However, enterprise spending on software and services is expected to remain strong.
Why we care. It’s good to see businesses remain committed to long-term goals even as the economic picture worsens. Companies clearly know that increased productivity and efficiency requires continuing IT investments.
Worldwide IT spending this year is expected to total $4.5 trillion, an increase of 2.4% from 2022, according to Gartner. This is a huge drop from last quarter when it predicted a 5.1% growth rate. Inflation is the main reason for this. Spending on devices is forecast to drop by 5.1%. This follows a 10.6% drop in 2022.
Spending on data center systems appears to have fallen off a cliff, going from 12% growth last year to an expected 0.7 growth rate in 2023. While communications services are only expected to increase 0.1% this year, that’s a huge improvement over 2022’s 2.4% drop.
By contrast software and IT services are projected to increase by 9.3% and 5.5% in 2023, respectively. This marks another strong year for those segments. In 2022 software was up 7.1% and services increased 3%.
“Consumers and enterprises are facing very different economic realities,” John-David Lovelock, distinguished VP Analyst at Gartner, said in a statement. “While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown.”
About the author
Constantine von Hoffman is managing editor of MarTech. A veteran journalist, Con has covered business, finance, marketing and tech for CBSNews.com, Brandweek, CMO, and Inc. He has been city editor of the Boston Herald, news producer at NPR, and has written for Harvard Business Review, Boston Magazine, Sierra, and many other publications. He has also been a professional stand-up comedian, given talks at anime and gaming conventions on everything from My Neighbor Totoro to the history of dice and boardgames, and is author of the magical realist novel John Henry the Revelator. He lives in Boston with his wife, Jennifer, and either too many or too few dogs.
