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According to the latest forecast by Gartner, Inc., worldwide IT spending is set to total $4.7 trillion in 2023, showing a 4.3% increase from 2022. As CIOs face challenges in acquiring IT talent, they are shifting their focus towards technologies that promote automation and efficiency for scalable growth with fewer employees.
John-David Lovelock, Distinguished VP Analyst at Gartner, stated that digital business transformations are evolving, with IT projects now emphasizing inward-facing optimization efforts rather than solely focusing on external-facing deliverables like revenue and customer experience.
The software segment is projected to experience double-digit growth in 2023 as organizations increase utilization and reallocate spending to core applications and platforms that enhance efficiency, such as enterprise resource planning (ERP) and customer relationship management (CRM) applications. Additionally, vendor price increases will continue to drive software spending.
However, the devices spending is expected to decline by 8.6% in 2023 due to the impact of inflation on consumer purchasing power.
Worldwide IT Spending Forecast (Millions of $)
| 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | |
| Data Center Systems | 221,223 | 16.6 | 217,880 | -1.5 | 235,530 | 8.1 |
| Devices | 766,279 | -6.3 | 700,023 | -8.6 | 748,150 | 6.9 |
| Software | 803,335 | 10.3 | 911,663 | 13.5 | 1,039,175 | 14.0 |
| IT Services | 1,305,699 | 7.5 | 1,420,905 | 8.8 | 1,585,373 | 11.6 |
| Communications Services | 1,423,075 | -1.9 | 1,461,662 | 2.7 | 1,517,877 | 3.8 |
| Overall IT | 4,519,610 | 2.7 | 4,712,133 | 4.3 | 5,126,105 | 8.8 |
In India, IT spending is forecasted to reach $112.2 billion in 2023, with Indian CIOs continuing to invest in improving employee productivity and customer experience, leading to a 14.6% annual growth in enterprise software spending. Talent shortages will drive an 8.0% annual growth in IT services spending in India.
India IT Spending Forecast (Millions of $)
| 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | |
| Data Center Systems | 3,766 | 17.7 | 3,588 | -4.7 | 3,774 | 5.2 |
| Devices | 49,853 | 2.0 | 45,688 | -8.4 | 51,209 | 12.1 |
| Software | 13,103 | 14.6 | 15,016 | 14.6 | 17,855 | 18.9 |
| IT Services | 21,837 | 13.3 | 23,583 | 8.0 | 27,196 | 15.3 |
| Communications Services | 24,651 | 0.2 | 24,245 | -1.6 | 25,047 | 3.3 |
| Overall IT | 1,13,210 | 5.4 | 1,12,121 | -0.9 | 1,25,080 | 11.6 |
Generative AI is a topic of interest for business and IT leaders, though it is not yet significantly impacting IT spending levels. In the long term, generative AI is expected to be incorporated into enterprises through existing spending channels, such as software, hardware, and services that organizations already use.
Lovelock emphasized that while enterprises may not need AI in production this year, having a clear AI strategy is crucial for success in the evolving business landscape.
