According to the latest forecast by Gartner Inc., worldwide information technology spending is set to grow by 2.4 per cent, totaling US$4.5 trillion in 2023. This is down from Gartner’s previous quarter’s forecast of 5.1 per cent growth.

Spending in software and IT services are projected to increase by 9.3 per cent and 5.5 per cent, respectively, in 2023. End-user hardware spending, in contrast, is forecast to plummet as both consumers and enterprises defer device upgrades.

“During the height of the pandemic, employees and consumers had technology refreshes of tablets, laptops and mobile phones due to remote work and education,” said John-David Lovelock, VP analyst at Gartner. “Without a compelling reason for an upgrade, device assets are being used longer and the market is suffering.”

While inflation continues to weaken consumer purchasing power, and contribute to layoffs in business to consumer (B2C) enterprises, IT spending is expected to keep up its momentum, in spite of an impending recession.

Furthermore, as software spend goes up, the IT services market is growing, and companies are looking to bring in outside IT staff for implementation and support. Spending on consulting is expected to reach US$264.9 billion in 2023, a 6.7 per cent increase from 2022.

“CIOs are losing the competition for talent,” said Lovelock. “IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects.”

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