According to Gartner’s latest forecast, global IT spending will reach $4.5 trillion in 2022, a 3% increase from 2021. While IT spending is expected to grow in 2022, it will be at a much slower pace than 2021 as consumers cut spending on PCs, tablets and printers and device spending is expected to fall by 5%.
“Inflation is an important issue for everyone. Central banks around the world are focused on fighting inflation and headline inflation rates are expected to come down by the end of 2023. However, current volatility in inflation and exchange rates should not be expected to deter CIOs from their 2022 investment plans,” said John-David Lovelock, Distinguished Research Vice President at Gartner. “Companies that don’t invest in the short term are likely to fall behind in the medium term and risk being out in the long term.”
Price hikes and supply uncertainties, exacerbated by Russia’s invasion of Ukraine, have accelerated the transition in purchasing preferences of CIOs and businesses in general from ownership to services – leading to growth in cloud spending of 18.4% in 2021 and 2020 an expected growth of 22.1% in 2022. Demand for cloud services is not only transforming the IT services industry, but is also driving server spending for 16.6% growth in 2022 as hyperscalers expand their data centers.
Spending on data center systems is forecast to experience the strongest growth of all segments in 2022 at 11.1%. Cloud consulting and implementation and cloud managed services are expected to grow 17.2% in 2022 from $217 billion in 2021 to $255 billion in 2022, encompassing the entire IT services segment grow by 6.2% in 2022.
Skills shortages impact IT spending
The critical global skills shortage is expected to ease by the end of 2023. Efforts by companies to complete digital transformation will slow down, leaving time for training and upskilling of existing staff. However, in the near future, CIOs will be forced to take action to offset rising IT demand and declining IT workforces.
The IT job market remains tight, making it difficult to attract and retain talent. The Gartner Global Labor Market Survey, which surveyed nearly 18,000 employees in the first quarter of 2022, found that compensation is the number one factor in attracting and retaining IT talent. Technology service providers are raising the prices of IT to allow for competitive salaries. This leads to an increase in spending on software and services through 2022 and 2023. Global software spending is expected to grow 9.6% to $806.8 billion through 2022, and global spending on IT services is expected to grow 1st will reach $.3 trillion.
“In addition, CIOs are increasingly using IT services to compensate for the lack of qualified IT personnel. Tasks that require lower skills are typically outsourced to managed services firms to free up staff, while critical strategy work that requires high-end skills unattainable for many organizations is increasingly being handled by outside consultants ‘ said Lovelock.