The predicted figures for global IT spending in 2024 are expected to increase by 6.8%, reaching a total of $5 trillion, and IT services will surpass communications services spending for the first time, according to new projections from Gartner. With an anticipated increase of 0.3% only from the previous year, this revision is a climbdown from the earlier predicted growth of 8%.

John-David Lovelock, Distinguished VP Analyst at Gartner, stated that while Generative AI (GenAI) created considerable anticipation in 2023, "it won’t significantly change the growth of IT spending in the near-term. Similar to IoT, blockchain, and other big trends we have experienced." Lovelock also highlighted that "2024 will be the year when organisations actually invest in planning for how to use GenAI, however, IT spending will be driven by more traditional forces, such as profitability, labour, and dragged down by a continued wave of change fatigue."

With a projected growth rate of 8.7% in 2024, IT services are on track to overtake the erstwhile leader, communication services, becoming the largest segment of IT spending with a total investment of $1.5 trillion. This shift is primarily attributed to organisations' increased interest in efficiency and optimisation projects, particularly against a backdrop of economic unpredictability.

Speaking about the decreasing consumer spending on communication services and devices, Lovelock explained, "Adoption rates among consumers for devices and communication services plateaued over a decade ago. Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growths, so being surpassed by software and services was inevitable." He also suggested that until a saturation point is reached in utilising technology within an organisation, a plateau in enterprise IT spending is unlikely.

Apart from this shift, change fatigue among Chief Information Officers (CIOs) continues to be a major factor influencing overall IT expenditure. "The overall IT spending growth rate for 2023 was 3.3%, only a 0.3% increase from 2022. This was largely due to change fatigue among CIOs," said Lovelock. This discomfort could sink into change resistance, deterring CIOs from signing new contracts, embarking on long-term plans, and adopting new technology partners.

In terms of the diverse IT spending segments, Gartner forecasts robust growth for software, with a 12.7% increase on the cards, adding over $116 billion to the 2023 total. Meanwhile, devices are expected to register a growth rate of 4.6% in 2024, with data centre systems close behind at 7.5%. Lastly, communication services are projected to grow at a relatively modest 2.3% in 2024.

Gartner's IT spending forecast methodology heavily relies on the comprehensive analysis of the sales by over a thousand vendors spanning the full spectrum of IT products and services. By combining primary research techniques and secondary research sources, Gartner has produced a comprehensive database of market size data that forms the foundation for its forecast.