Worldwide IT spending is projected to total $5.1 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner. 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.

“In 2023 and 2024, very little IT spending will be tied to GenAI,” John-David Lovelock, distinguished VP analyst at Gartner, said. “However, organizations 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 CIOs recognize 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.”

Gartner analysts are discussing the trends that are impacting the IT market during Gartner IT Symposium/Xpo, taking place through Thursday.

Cloud Price Increases Bolster Software and IT Services Spending

The software and IT services segments will both see double-digit growth in 2024, largely driven by cloud spending. Global spending on public cloud services is forecast to increase 20.4% in 2024, and similarly to 2023, the source of growth will be combination of cloud vendor price increases and increased utilization.

While inflation’s effect 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% (see Table 1).

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

Source: Gartner (October 2023)

Cybersecurity spending is also driving growth in the software segment. 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.

“AI has created a new security scare for organizations,” Lovelock said. “Gartner is projecting double-digit growth across all segments of enterprise security spending for 2024.”

CIOs’ Change Fatigue Delays New IT Spending

CIOs are experiencing change fatigue, which is often manifesting as a hesitation to invest in new projects and initiatives. This is pushing a portion of 2023’s IT spending into 2024, a trend that is expected to continue into 2025.

“Faced with a new wave of pragmatism, capital restrictions or margin concerns, CIOs are delaying some IT spending,” Lovelock said. “Organizations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns.”

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.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q23 Update.”

Learn more in the complimentary Gartner webinar IT Spending Forecast, 3Q23 Update: The Impact of GenAI.