During COVID-19, many businesses adopted tech-enabled solutions and accelerated their digital transformation journey to continue their operation and customer service and stay competitive. The momentum can be seen in 2022 too; according to Gartner’s latest survey, Worldwide IT spending is projected to reach $4.4 trillion in 2022, an increase of 4% from last year.
Despite COVID-19, many other factors such as inflation, currency fluctuations, and supply chain disruptions are affecting business badly in some countries, yet, Gartner survey data shows CIOs are accelerating their IT investment as they recognize the importance of flexibility and agility in responding to disruptions.
Inflation impacts on IT hardware (e.g., mobile devices and PCs) from the past two years are finally dissipating and spilling over into software and services. In addition, with the current shortage of IT talent prompting more competitive salaries, technology service providers are increasing their prices, which is helping to increase spending growth in these segments through 2022 and 2023. As a result, software spending is expected to grow 9.8% to $674.9 billion in 2022, and IT services are forecast to grow 6.8% to reach $1.3 trillion.
The demand for enterprise application software, infrastructure software, and managed services in the near and long term demonstrates that digital transformation is not a one- or two-year trend; instead, it is systemic and long-term. For example, infrastructure as a service (IaaS) underpins every primary consumer-focused online offering and mobile application, accounting for a significant portion of the almost 10% growth in software spending in 2022.
Gartner expects digital business initiatives such as experiential end-consumer experience and supply chain optimization to push spending on enterprise applications and infrastructure software into double-digit growth in 2023. However, price and wage inflation compounded with talent shortages and other delivery uncertainties are expected to be greater impingements on CIOs’ plans in 2022 but will still not slow down technology investments.
“CIOs anticipate having the financial and organizational ability to invest in key technologies throughout this year and next,” John-David Lovelock, “Some IT spending was on hold in early 2022 due to the Omicron variant and subsequent waves but is expected to clear in the near-term.
“CIOs who keep their eye focused on key market signals, such as the shift from analog to digital business and buying IT to building it, as well as negotiate with their vendor partners to assume ongoing risks, will fare better in the long-term. At this point, only the most fragile companies will be forced to pivot to a cost cutting approach in 2022 and beyond.”
More detailed analysis of the outlook for global IT spending is available in the Gartner webinar “IT Spend Forecast, 1Q22 Update.”
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