Enterprise IT remains bright amid gloomy tech spending forecast

Gartner has cut its forecast for growth in worldwide IT spending by more than 50% from just a few months ago. However, enterprise spending on software and services is expected to remain strong.

Why we care. It’s good to see businesses remain committed to long-term goals even as the economic picture worsens. Companies clearly know that increased productivity and efficiency requires continuing IT investments. 

Worldwide IT spending this year is expected to total $4.5 trillion, an increase of 2.4% from 2022, according to Gartner. This is a huge drop from last quarter when it predicted a 5.1% growth rate. Inflation is the main reason for this. Spending on devices is forecast to drop by 5.1%. This follows a 10.6% drop in 2022.

Spending on data center systems appears to have fallen off a cliff, going from 12% growth last year to an expected 0.7 growth rate in 2023. While communications services are only expected to increase 0.1% this year, that’s a huge improvement over 2022’s 2.4% drop.

By contrast software and IT services are projected to increase by 9.3% and 5.5% in 2023, respectively. This marks another strong year for those segments. In 2022 software was up 7.1% and services increased 3%.

“Consumers and enterprises are facing very different economic realities,” John-David Lovelock, distinguished VP Analyst at Gartner, said in a statement. “While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown.”