Gartner Forecasts 7.5% Growth in Global IT Spending by 2024

Global information technology (IT) spending is projected to reach $5.26 trillion in 2024, representing a 7.5% increase over 2023, according to the latest forecast from Gartner, Inc. While this figure is a decrease from the previous forecast of 8% growth, it is still a significant increase over the expected total spending of $5.06 trillion.

Generative AI (GenAI) Impacting Diverse Segments

Generative artificial intelligence (GenAI) is making its mark in all technology segments, although not all are benefiting in the same way. John-David Lovelock, vice president and distinguished analyst at Gartner, commented: “Some increases in software spending are attributed to GenAI, but for a software company, GenAI is more like a tax. Revenue gains from the sale of GenAI add-ons or tokens flow back to its AI model vendor partner.”

Spending on data centre systems is expected to grow 24% in 2024, compared to the previous quarter’s 10% growth forecast. This is largely due to intensive planning for GenAI. “GenAI’s compute power needs are being felt throughout the data centre, and spending in that segment reflects this voracious demand,” Lovelock said.

Persistent Fatigue in CIO Teams

Spending on IT services is now projected to grow by 7.1% in 2024, down from the 9.7% previously forecast, due in part to slower spending in sub-segments such as consulting and business process services.

“The CIO turnaround fatigue we saw earlier in the year has now subsided and contract backlogs going back to Q3 2023 are clearing. We expect to see a greater rush towards the end of the year to offset the slow start,” Lovelock noted.

Gartner Forecast Methodology

Gartner’s IT spending forecast methodology is based on a rigorous analysis of sales from more than 1,000 vendors across the full range of IT products and services. Gartner uses primary research techniques, supplemented by secondary research sources, to build a comprehensive database of market-size data on which to base its forecast.

Gartner’s quarterly IT spending forecast reports provide a unique perspective on IT spending in the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The latest IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 2Q24 Update.”

Gartner’s forecast for global IT spending in 2024 shows significant growth driven by demand for GenAI and data centre systems. However, challenges remain, especially in the area of IT services. Businesses must be prepared to adapt to this changing landscape to take advantage of the opportunities presented by the market.