Global IT Spending Expected to Hit $4.6 Trillion in 2023 Despite Economic Turbulence

Gartner has released a new forecast predicting that worldwide IT spending will reach a staggering $4.6 trillion in 2023, a 5.5% increase from 2022. This growth is anticipated to occur despite persistent global economic turbulence, with all regions worldwide expected to experience positive IT spending growth in 2023.

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

 (in $ millions)2022 Spending2022 Growth (%)2023 Spending2023 Growth (%)2024 Spending2024 Growth (%)
Data Center Systems216,09513.7224,1233.7237,7906.1
IT Services1,250,2243.51,364,1069.11,502,75910.2
Communications Services1,424,603-1.81,479,6713.91,536,1563.8
Overall IT4,401,8090.54,643,6285.55,043,8058.6
Source: Gartner (April 2023)

Despite ongoing macroeconomic challenges, digital transformation continues to thrive, unaffected by economic turbulence. IT spending is predicted to stay strong in 2023, even as many countries experience near-flat GDP growth and high inflation. For chief information officers (CIOs), prioritizing investments will be essential in order to leverage digital technology effectively. This will enable them to transform their companies’ value propositions, revenue streams, and client interactions, while maintaining resilience in an uncertain economic climate.

Gartner’s forecast indicates that the software segment will enjoy double-digit growth in 2023, as enterprises allocate spending to gain competitive advantages through enhanced productivity, automation, and other software-driven initiatives. On the other hand, the devices segment is predicted to decline nearly 5% in the same period due to consumers delaying device purchases amidst dwindling purchasing power and lack of buying incentives.

The balance between maintaining technologies and driving business growth is evident in the dichotomies in IT spending. For instance, while data center markets see sufficient spending to maintain existing on-premises data centers, new spending is shifting towards cloud options, fueling the growth in IT services.

The IT services segment is expected to continue its upward trajectory through 2024, primarily driven by the infrastructure-as-a-service market, which is projected to grow by over 30% this year. Notably, for the first time, price is becoming a key driver for increased spending in cloud services segments, rather than solely increased usage.

Although exposure from the collapse of Silicon Valley Bank, Signature Bank, and Credit Suisse has been relatively contained, tech startups are bracing for renewed scrutiny from stakeholders, clients, and prospects. Lovelock emphasized the need for tech CEOs to act swiftly, ensuring that their organizations are prepared to weather these challenges by conserving working capital, monitoring cash impacts, securing credit access, and maintaining a watchful eye on talent and culture.