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Global IT spending is expected to total $4.6 trillion in 2023, a 5.5% increase from 2022, while in the Middle East and North Africa (Mena), IT spending is expected to grow 2% to $175.5 billion from $171.9 billion in 2022.
That’s according to the latest forecast from technology and research consulting firm Gartner. Despite continued turmoil in the global economy, all regions of the world are expected to experience IT spending growth in 2023.
“Macroeconomic headwinds are not slowing digital transformation,” said John-David Lovelock, Distinguished Vice President Analyst at Gartner. The rate remains high. Prioritization will be critical as CIOs look to optimize spend propositions, revenue and customer engagement while leveraging digital technologies to transform company value. “
software department
The software sector will post double-digit growth this year as companies prioritize gaining a competitive advantage through productivity improvements, automation and other software-driven transformation initiatives. Conversely, the equipment segment will decline by nearly 5% in 2023, as consumers delay equipment purchases due to reduced purchasing power and lack of motivation to purchase.
As businesses grapple with ongoing economic turmoil, the divergence between technologies maintained and those that drive business is evident in their position relative to overall average IT spending growth.
“CIOs face a balancing act that is evident in the dichotomy of IT spending,” Lovelock said. “For example, the data center market has sufficient spending to maintain existing on-premises data centers, but new spending has shifted to cloud options, which is reflected in growth in IT services.”
The IT services segment will continue on its growth trajectory through 2024, driven primarily by the infrastructure-as-a-service market, which is expected to grow by more than 30% this year. For the first time, price is a key driver of increased spending in cloud services, not just increased usage.
tech startups
The collapse of Silicon Valley Bank, Signature Bank and Credit Suisse has sent shockwaves through the banking and technology industries. While risks remain relatively limited, tech start-ups may face new questions and scrutiny from stakeholders, customers and prospects.
“It’s not just a technology issue, because these companies lend to startups of all kinds — not just IT,” Lovelock said. “Tech CEOs must urgently ensure that they drive their organizations forward by conserving working capital, monitoring the impact on cash, ensuring access to credit, and keeping a close eye on talent and culture. Once the organization is properly prepared, the technology CEO can guide and engage Employees source, accelerate and execute market opportunities.”
Tech talent shortage continues amid layoffs
While layoffs continue to affect the entire tech industry, there remains a critical shortage of skilled IT labor. Demand for technical talent greatly outstrips supply, and based on projected IT spending, this will continue until at least 2026.
“Tech layoffs don’t mean the IT talent shortage is over,” Lovelock said. “In-house services IT spending is slowing across all industries and businesses are not keeping pace with wage growth. As a result, businesses will spend more to retain fewer workers and will turn to IT services firms to fill the gaps.”
Gartner’s methodology for forecasting IT spending relies heavily on a rigorous analysis of sales by more than 1,000 vendors across the full spectrum of IT products and services. Gartner uses primary research techniques, supplemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecasts. — trade arab news agency
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