Thursday 29 Feb 2024
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KUALA LUMPUR (Jan 19): Worldwide IT spending is projected to total US$4.5 trillion (RM19.44 trillion) in 2023, an increase of 2.4% from 2022, according to the latest forecast by Gartner Inc.

In a statement on Wednesday (Jan 18), the consulting firm said this is down from the previous quarter’s forecast of 5.1% growth.

It said that while inflation continues to erode consumer purchasing power and drive device spending down, overall enterprise IT spending is expected to remain strong.

Gartner distinguished vice-president analyst John-David Lovelock said consumers and enterprises are facing very different economic realities.

“While inflation is devastating consumer markets, contributing to layoffs at B2C (business-to-consumer) 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 (chief information officers) to become more hesitant, delay decisions or reorder priorities.

“We’ve seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof,” he said.

The software segment is projected to grow 9.3% in 2023, while IT services is projected to grow 5.5%, Gartner said.

The devices segment is forecast to decline 5.1% this year as both consumers and enterprises lengthen device refresh cycles.

Lovelock said that during the height of the pandemic, employees and consumers had technology refreshes of tablets, laptops and mobile phones due to remote work and education.

“Without a compelling reason for an upgrade, device assets are being used longer and the market is suffering,” he said.

Gartner said job vacancy rates have been increasing every quarter and the open jobs per unemployed rate is at record lows in many countries.

It said high competition for talent is challenging CIOs to hire skilled IT staff, limiting growth for companies which struggle to scale without the requisite talent.

Simultaneously as software spend continues to rise, the IT services market is growing as companies look to bring in outside IT staff for implementation and support.

For example, spending on consulting is expected to reach US$264.9 billion in 2023, a 6.7% increase from 2022, it said.

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