According to a new forecast by Gartner, worldwide IT spending is expected to reach $4.7 trillion in 2023, driven primarily by increased software and IT services expenditure. The report indicates a year-on-year increase of 4.3%, with a projection that global IT spending could grow by as much as 8.8% in 2024, reaching a total of $5.1 trillion. However, the study suggests that artificial intelligence (AI) has not yet substantially impacted IT spending, with organizations likely to implement AI using existing budgets.
AI has not significantly impacted IT spending
Gartner’s findings reveal a shift in spending patterns as companies focus on internal improvements rather than external revenue growth. Some companies have redirected their attention to enhancing internal processes and achieving operational efficiencies. This change aligns with the increased interest in infrastructure software and robust growth in robotic process automation (RPA).
AI has not significantly impacted IT spending, according to the report. Many organizations are incorporating AI capabilities into their existing product suites, such as Google Duet AI and Microsoft Copilot, which are either free or already factored into budgets. Additionally, businesses can acquire AI capabilities through contracts with enterprise software providers. The widespread availability of AI across various technologies, including printers, mobile phones, and security services, makes tracking its exact impact on specific markets challenging.
AI and business strategy
AI’s unique characteristic lies in its ability to utilize different technologies as channels to market. It can be integrated into numerous products and services, such as consulting and outsourcing, to deliver enhanced offerings or improve product features. Companies like Accenture, Deloitte, PwC, and Ernst and Young are expected to leverage AI for better product delivery, scalability, and cost reduction without significantly increasing their workforce.
The issue of job losses to AI is complex, as it ultimately depends on business decisions and objectives. John-David Lovelock, a distinguished VP analyst at Gartner, explains that AI can eliminate mundane tasks, freeing up employees’ time to focus on value-added activities. Consequently, companies may find that the value derived from each employee increases, potentially leading to the need for more hires rather than job losses.
Decline in devices segment
The devices segment, including mobile phones, continues to decline, down 8.6% in 2023 to $700 billion, as highlighted in Gartner’s research. The sales of mobile phones are not expected to return to pre-pandemic levels until 2025. Following a brief recovery, the devices segment will experience “close to zero percent growth” by 2027.
Gartner’s forecast predicts a positive trajectory for worldwide IT spending, driven by software and IT services. Despite the lack of a significant AI impact on IT spending, organizations are likely to integrate AI capabilities within their existing budgets. Shifting spending patterns indicate a focus on internal improvements and operational efficiencies. The future role of AI in job displacement remains a complex issue as businesses strive to optimize productivity and increase value. While the devices segment continues to decline, investments in infrastructure software and RPA demonstrate sustained growth potential in the IT industry.
