Gartner Predicts IT Spending Growth Despite Economic Strife

Gartner forecasts that global IT spending is set to grow just 3% this year. While this percentage is low, the analyst firm noted that the growth is surprising considering inflation hikes and challenges caused by geopolitical conflicts and the skills gap. Gartner forecasts that global IT spending is set to grow just 3% this year. While this percentage is low, the analyst firm noted that the growth is surprising considering inflation hikes and challenges caused by geopolitical conflicts and the skills gap. Overall, the 3% growth projection will push worldwide IT spending to $4.5 trillion by the end of 2022. “While IT spending is expected to grow in 2022, it will be at a much slower pace than 2021 due to spending cutbacks on PCs, tablets, and printers by consumers, causing spending on devices to shrink 5%,” noted the analyst firm in a statement. Although spending is slowing, CIOs are going full steam ahead with IT plans in order to meet the increasing demand for cloud services. This demand is leading the spend on servers which Gartner expects to grow 16.6% by the end of this year. “The current levels of volatility being seen in both inflation and currency exchange rates is not expected to deter CIOs’ investment plans for 2022,” said Gartner Research VP John-David Lovelock. “Organizations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term.” Russia’s invasion of Ukraine hindered steady market prices and delivery guarantees, which accelerated the transition in purchasing preference, Gartner noted. Service replaced ownership as a purchase preference for CIOs and businesses in general, which in turn ran up cloud spending investments. Gartner forecasts cloud spending to grow 22.1% in 2022, compared to 18.4% in 2021. With the expected growth of cloud consulting and implementation, and cloud managed services, Gartner reports the IT industry will see a receipt of $255 billion in 2022. This is a growth of 17.2% from 2021’s total of $217 billion. At the same time, hyperscalers are building out their data centers, making data center spending the strongest growth prediction in all categories for this year at 11%.  As IT labor continues to take the punch when it comes to skills shortage, Gartner says by 2023 demands will begin to taper. In the meanwhile, the skills gap “is driving an increase in spending, in software, and services through 2022 and 2023” as CIOs use IT services to fill staffing gaps. Since IT leaders’ current focus is on digital transformation completions, there is not much wiggle room to upskill and reskill employees. “CIOs will be forced to take action to balance increased IT demand and staffing levels,” according to Gartner. “CIOs are using more IT services to assist in the lack of skilled IT staff. Tasks that require lower skill sets tend to be outsourced to managed service firms to alleviate staff time, while critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,” concluded Lovelock.