The software and IT services segments are projected to see the most growth in terms of spending worldwide, with 9.3 per cent and 5.5 per cent increases in 2023, respectively.
While software spending is set to go towards prioritised tech areas such as information security, Desktop-as-a-Service and supply chain management, growing investment in external IT services for implementation and support comes as the tech industry looks to close the ever-present skills gap.
With tech talent increasingly preferring to work at technology services providers, as opposed to enterprises with multiple functions due to the higher possibility of career progression, enterprise CIOs are finding themselves needing to outsource parts of projects.
Meanwhile, the devices segment is once again projected to decline, this time by 5.1 per cent this year as enterprises lengthen device refresh cycles.
While businesses globally are currently looking to navigate an uncertain economic climate, today’s forecast shows that tech budgets remain strong, with CIOs unlikely to be held back.
“Consumers and enterprises are facing very different economic realities,” said John-David Lovelock, distinguished vice-president analyst at Gartner. “While inflation is devastating consumer markets, contributing to layoffs at B2C companies, businesses continue to increase spending on digital business initiatives despite the world economic slowdown.
“A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities. We’ve seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth.
“However, IT budgets are not driving these shifts, and IT spending remains recession-proof.”
Price stability and device shelf life preserving budgets
According to Lovelock, previous price increases for products and services such as cloud computing, software and consulting services — brought about by needed salary increases across the industry — are “pretty much over for 2023”.
The predicted stability of prices for tech and consulting over this year, along with the increasing shelf life of devices including laptops and tablets, are set to be prominent factors in the preservation of IT budgets going forward.
“The things that CIOs are buying aren’t inflating in the same way that we look at Consumer Price Index inflation,” Lovelock explained.
“They’re skewing away from buying mobile phones, PCs, tablets and laptops, partially because the shift from luxuries to necessities and from wants to needs is there, but mostly because these devices are so young.
“During the height of the pandemic, employees and consumers had refreshes of tablets, laptops and mobile phones due to remote work and education. Without a compelling reason for an upgrade, device assets are being used longer and the market is suffering.”
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