According to recent research by Canalys, a renowned industry analyst firm, the worldwide total addressable IT market is projected to experience a growth of 3.5% this year, reaching a substantial $4.7 trillion. This growth is anticipated despite cautious spending patterns due to ongoing economic challenges. Partner-delivered IT technologies and services are set to surpass $3.4 trillion in 2023, accounting for over 70% of the global total addressable IT market.
While the growth rate of North American spending is expected to slow down to 2.8% this year from 8.5% in 2022, constituting 37.7% of the total market, other regions show a more optimistic outlook. The Asia Pacific region is forecasted to experience a growth of 4.5%, EMEA at 3.4%, and Latin America at 3.0%.
Matthew Ball, Chief Analyst at Canalys, emphasized that long-term technology trends will remain the driving force behind growth opportunities for vendors and channel partners in the year ahead. He stated, “Digital transformation, cybersecurity, compliance, sustainability, and the emergence of generative AI will underpin IT services engagement, the adoption of new software, and infrastructure refresh.” However, he also acknowledged challenges like the threat of recession, rising interest rates, high inflation, trade disputes, and extreme weather events that could disrupt the industry.
The research also highlighted specific growth opportunities within the IT landscape. Cybersecurity is expected to witness an 11.1% increase, reaching $79 billion, reflecting the heightened need for safeguarding data, systems, and individuals from rising threats. Network infrastructure spending is set to rise by 13.9% to $72 billion, driven by campus switch and Wi-Fi 6/6e access point orders. Cloud application software spending is projected to grow by 19.3% to $215 billion, propelled by price hikes, renewals, and upselling subscriptions. IT services spending is anticipated to expand by 7.5% to $1.5 trillion, driven by public cloud optimization, cybersecurity transformation, and business adoption of generative AI. Managed IT services are predicted to become a half-trillion-dollar industry.
However, sales of servers, storage, and client devices might experience negative or flat growth after the surge in demand during the pandemic. Canalys anticipates AI servers to be an exception in this trend.
Partner-delivered IT technologies and services are projected to account for more than 70% of the total market, reaching $3.4 trillion in 2023. IT spending through partners is expected to grow by 3.7%, outpacing direct spending between customers and vendors. Ball noted, “We’re looking at a sector that will nearly double in size over the next decade,” underlining the importance of the channel for the success of vendors.
Despite initial economic concerns, the research indicates early signs of improved demand and easing budgetary constraints for the latter half of 2023. Growth is predicted to rebound in 2024, fueled by increased technology investments by businesses and governments worldwide.
Ball concluded, “Comprehensive understanding of market dynamics is core to our approach at Canalys,” emphasizing the significance of delving deeper into these numbers for industry leaders and decision-makers.
