KUALA LUMPUR (July 17): Global information technology (IT) spending is expected to total US$5.26 trillion (RM24.60 trillion) in 2024, or up 7.5% from 2023, according to the latest forecast by Gartner Inc.
In a statement on Tuesday, the consulting firm said this is a decrease from the previous quarter’s forecast of an 8% growth, but an increase of the overall spend forecast of US$5.06 trillion.
Gartner distinguished analyst and research vice-president John-David Lovelock said generative AI (GenAI) is being felt across all technology segments and subsegments, but not to everyone’s benefit.
“Some software spending increases are attributable to GenAI, but to a software company, GenAI most closely resembles a tax.
“Revenue gains from the sale of GenAI add-ons or tokens flow back to their AI model provider partners,” he said.
Data centre system spending
Gartner said spending on data centre systems is expected to increase 24% in 2024, up from the previous quarter’s forecast of a 10% growth.
It said this is due in large part to increased planning for GenAI.
“The compute power needs of GenAI are being felt across data centres, and spending in that segment reflects this ravenous demand,” said Lovelock.
Spending to grow 7.1% in 2024
Gartner said IT services spending is now projected to grow 7.1% in 2024, down from 9.7% within the last forecast, due in part to slower spending across subsegments that include consulting and business process services.
Lovelock said the change fatigue in chief information officers that was seen at the start of the year had now abated, and the contract backlogs going back to the third quarter of 2023 are being cleared.
“We expect to see a larger rush towards the end of the year to make up for the slow start," said Lovelock.
Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of 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 forecasts.