KUALA LUMPUR (Oct 19): Worldwide IT spending is projected to reach a total US$5.1 trillion (RM24.2 trillion) in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner.

In a statement on Wednesday, the consulting firm said that while generative AI (GenAI) has not yet had a material impact on IT spending, investment in AI more broadly is supporting overall IT spending growth.

Gartner distinguished VP analyst John-David Lovelock said that in 2023 and 2024, very little IT spending will be tied to GenAI.

“However, organisations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps.

“The hype around GenAI is supporting this trend, as chief information officers (CIOs) recognise that today’s AI projects will be instrumental in developing an AI strategy and story before GenAI becomes part of their IT budgets starting in 2025,” he said.

Gartner said the software and IT services segments will both see double-digit growth in 2024, largely driven by cloud spending.

It said global spending on public cloud services is forecast to increase 20.4% in 2023 and 2024, with the source of growth stemming from a combination of cloud vendor price increases and increased utilisation.

While the effect of inflation on both consumers and businesses plagued the devices market throughout 2022 and 2023, devices spending will begin to rebound modestly in 2024, growing 4.8%, it said.

Gartner said cybersecurity spending is also driving growth in the software segment.

It said in the 2024 Gartner CIO and Technology Executive Survey, 80% of CIOs reported that they plan to increase spending on cyber/information security in 2024, the top technology category for increased investment.

Lovelock said AI has created a new security scare for organisations.

“Gartner is projecting double-digit growth across all segments of enterprise security spending for 2024,” he said.

Gartner said CIOs are experiencing change fatigue, which often manifests as a hesitation to invest in new projects and initiatives.

It said this is pushing a portion of 2023’s IT spending into 2024, a trend that is expected to continue into 2025.

Lovelock said that faced with a new wave of pragmatism, capital restrictions or margin concerns, CIOs are delaying some IT spending.

“Organisations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns,” he said.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services.

Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.