IT Spending Forecasted to Top $5 Trillion in 2024

IT spending worldwide will grow by 8%, reaching $5.1 trillion in 2024, according to a new report from Gartner. The market research firm pointed to AI as a contributing factor in that growth, but the impacts of generative AI won't be felt until the following year.

"In 2023 and 2024, very little IT spending will be tied to GenAI," said John-David Lovelock, distinguished VP Analyst at Gartner, in a prepared statement. "However, organizations 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 recognize 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."

For the forecast period, two of the largest categories of IT spending will also see the most growth. IT services, the largest category, will grow 10.4% from 2023 to 2024, reaching $1.547 trillion. And software, the third-largest category (behind communications services), will grow 13.8% to $1.042 trillion.

Other growth categories include:

  • Data center systems, projected to increase 9.5% in 2024 to $260.2 billion;

  • Devices, expected to grow 4.8% to $722.47 billion (following declines of 10% in 2023 and 6.3% in 2022); and

  • Communications services, up 3.3% to $1.497 trillion.

Growth is being driven by cloud spending resulting from increased cloud prices and increased use of the cloud. Worldwide cloud spending is forecast to grow 20.4% in 2024. It's also being driven by information security spending (itself driven, in part, by scares related to AI).

"AI has created a new security scare for organizations," Lovelock said. "Gartner is projecting double-digit growth across all segments of enterprise security spending for 2024."

Gartner also cited factors holding back IT spending. Change fatigue is one of them. As Gartner explained: "CIOs are experiencing change fatigue, which 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."

"Faced with a new wave of pragmatism, capital restrictions or margin concerns, CIOs are delaying some IT spending," Lovelock said. "Organizations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns."

For more information, check out Gartner's on-demand webinar on IT spending, accessible here.

About the Author

David Nagel is the former editorial director of 1105 Media's Education Group and editor-in-chief of THE Journal, STEAM Universe, and Spaces4Learning. A 30-year publishing veteran, Nagel has led or contributed to dozens of technology, art, marketing, media, and business publications.

He can be reached at [email protected]. You can also connect with him on LinkedIn at https://www.linkedin.com/in/davidrnagel/ .


Featured

  • AI-inspired background pattern with geometric shapes and fine lines in muted blue and gray on a dark background

    IBM Releases Granite 3.0 Family of Advanced AI Models

    IBM has introduced its most advanced family of AI models to date, Granite 3.0, at its annual TechXchange event. The new models were developed to provide a combination of performance, flexibility, and autonomy that outperforms or matches similarly sized models from leading providers on a range of benchmarks.

  • blue and green lines intersecting and merging in an abstract pattern against a light gray background with a subtle grid design

    Data Integration Market: Cloud Giants Down, AI Up

    "By 2027, AI assistants and AI-enhanced workflows incorporated into data integration tools will reduce manual intervention by 60 percent and enable self-service data management," according to research firm Gartner.

  • minimalist bookcase filled with textbooks featuring vibrant, solid-colored spines with no text, and a prominent number "25" displayed on one of the shelves

    OpenStax Celebrates 25th Anniversary

    OpenStax is celebrating its 25th anniversary as 2024 comes to a close. The open educational resources initiative from Rice University has served almost 37 million students in 153 countries and saved students nearly $3 billion in course material costs since its launch in 1999.

  • wind turbine and solar panels with glowing accents on the left and a digital shield surrounded by binary code on the right

    Educause Horizon Report: Sustainability Pressures Lead to Increased Cybersecurity Risks

    Educause recently released the 2024 Cybersecurity and Privacy Edition of its Horizon Report series, forecasting key trends, technologies, and practices shaping the future of cybersecurity and privacy in higher education.