Analyst outfit Gartner thinks 2023 global IT spending will be worse than expected as inflation continues to erode consumer purchasing power and shrink device budgets.
Big G expects $4.5 trillion to be spent this year, an increase of 2.4 per cent from 2022 but a dip from the previous quarter’s forecast of 5.1 per cent growth.
Software is projected to grow 9.3 per cent and IT services will grow 5.5 per cent in 2023, , according to Gartner.
The devices segment is expected to decline 5.1 per cent this year as consumers and enterprises lengthen device refresh cycles.
Gartner VP analyst John-David Lovelock said that consumers and enterprises were facing different economic realities.
“While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown. A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities,” he said.
Gartner had seen reshuffling among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof.”
The analyst said job vacancy rates were significantly impacted after increasing quarter by quarter.
Gartner added that high competition for talent is challenging CIOs to hire skilled IT staff, limiting growth for companies who struggle to scale without the requisite talent.
As software spend continues to rise, the IT services market was growing as companies look to bring in outside IT staff for implementation and support.
Spending on consulting is expected to reach $264.9 billion in 2023, a 6.7 per cent increase from 2022.
“CIOs are losing the talent competition, IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects,” Lovelock said.
