IT services emerge as top segment in global IT industry spending: Gartner

Indian IT spending to record a double-digit growth of 11.1% in 2024

Worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8 per cent from 2023, according to the latest forecast by Gartner. This is down from the previous quarter's forecast of 8 per cent growth. However, within the total IT spend, IT services have become the largest segment and are expected to grow 8.7 per cent in 2024.

Spending on IT services is expected to grow 8.7 per cent in 2024, reaching $1.5 trillion, said Gartner. This is largely due to enterprises investing in organizational efficiency and optimization projects. These investments will be crucial during this period of economic uncertainty.

Meanwhile, generative AI (GenAI) had significant hype in 2023, but it will not significantly change the growth of IT spending in the near term.

“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” said John-David Lovelock, Distinguished VP Analyst at Gartner.

He further added, “2024 will be the year when organizations actually invest in planning for how to use GenAI, however, IT spending will be driven by more traditional forces, such as profitability, labor, and dragged down by a continued wave of change fatigue.”

In India, the overall spending on IT is estimated to record a double-digit growth of 11.1 per cent in 2024, according to projections released by Gartner on Wednesday.

“Due to a lack of internal skills, Indian businesses are looking to partner with external providers in areas such as AI, industry cloud, security, and data analytics, resulting in the expected growth of IT services spending in 2024,” said the Gartner report.

The spending numbers will be led by spending in the software, IT services, and devices sector.

While the spending in the software sector is expected to grow at 13.4 per cent, the IT services and devices spend is projected to grow at 13.4 and 12.3 per cent, respectively.

“Device spending is expected to rebound in 2024 as Indian consumers expect to increase their spending when replacing their mobile phones and other devices this year,” the report further read.

“Even with the expected regained momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue. Change fatigue could manifest as change resistance — with CIOs hesitating to sign new contracts, commit to long-term initiatives, or take on new technology partners,” said the report.