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.