Global IT spending contracted 0.2% in 2022, dropping to $4.38 trillion—a rare instance of corporations spending less on digital business tools than in the previous year, according to IT consulting and research firm Gartner Inc.
Gartner had initially estimated that IT spending had increased 0.8% last year.
The firm now expects spending to increase 2.4% this year, less than half the rate of its previous estimate in October, as economic uncertainties continue to rattle markets, Gartner said in a report Wednesday.
Spending on business software and IT services is expected to remain steady year-over-year, together accounting for more than $2.16 trillion in projected spending in 2023, Gartner said. Within IT services, spending on consulting services alone is projected to reach $264 billion, up 6.7% from 2022, Gartner said.
Spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 24.7% year over year in the third quarter of 2022 (3Q22) to $23.9 billion. Spending on cloud infrastructure continues to outgrow the non-cloud segment although the latter had strong growth in 3Q22 as well, increasing at 16.5% year over year to $16.8 billion. The market continues to benefit from high demand and large backlogs, coupled with an improving infrastructure supply chain.
Spending on shared cloud infrastructure reached $16.8 billion in the quarter, increasing 24.4% compared to a year ago. IDC expects to see continuous strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2023. The dedicated cloud infrastructure segment grew 25.3% year over year in 3Q22 to $7.1 billion. Of the total dedicated cloud infrastructure, 45.2% was deployed on customer premises.
Why do we care?
The turbulence begins. One perspective would be that the turbulence is in the predictions rather than the actual implementation. The market will move along some wavy line; it’s the predictions that may be far more variable. Within the Gartner prediction, note that IT services will be steady, and consulting alone is increasing. That’s positive.
And why I also noted the IDC data – the cloud is going up. So cloud + consulting seems like a winning combination to me.