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Gartner Forecasts Worldwide IT Spending to Grow 5.1% in 2022

High Expectations for Digital Market Prosperity Will Boost Technology Investments Despite Potential Impacts of the Omicron Variant

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Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 5.1% from 2021, according to the latest forecast by Gartner, Inc. In India, IT spending will total $105.2 billion in 2022, an increase of 5.5% from 2021.

Despite the potential impacts of the Omicron variant, economic recovery with high expectations for digital market prosperity will continue to boost technology investments.

“2022 is the year that the future returns for the CIO,” said John-David Lovelock, distinguished research vice president at Gartner. “They are now in a position to move beyond the critical, short-term projects over the past two years and focus on the long term. Simultaneously, staff skills gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies.”

Gartner forecasts that the IT services segment – which includes consulting and managed services – is expected to have the second highest spending growth in 2022, reaching $1.3 trillion, up 7.9% from 2021 (see Table 1). Business and technology consulting spending, specifically, is expected to grow 10% in 2022.

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

 2021 Spending2021 Growth (%)  2022 Spending2022 Growth (%)  2023 Spending2023 Growth (%)  
Data Center Systems 

216,337

 

11.4

 

226,475

 

4.7

 

237,021

 

4.7

Enterprise Software604,94614.4671,73211.0751,93711.9
Devices787,41713.0813,6993.3804,253-1.2
IT Services1,186,10310.71,279,7377.91,391,7428.8
Communications Services 

 

1,444,324

 

 

3.4

 

 

1,462,712

 

 

1.3

 

 

1,494,167

 

 

2.2

Overall IT4,239,1279.04,454,3545.14,679,1195.0

Source: Gartner (January 2022)

Through 2025, organizations will increase their reliance on external consultants, as the greater urgency and accelerated pace of change widen the gap between organizations’ digital business ambitions and their internal resources and capabilities, according to Gartner.

“2022 is a growth year as Indian CIOs accelerate their long-term digital initiatives, despite the ongoing Omicron scare in India,” said Naveen Mishra, senior research director at Gartner. “Gartner’s 2022 Indian CIO & IT leader survey indicates increasing investment in artificial intelligence/ machine learning capabilities, business intelligence and analytics, and digital business solutions.”

With these investments, like their global peers, Indian CIO’s will also be challenged with skills shortage, leading to increasing dependence on external services partners. This will bolster the spending on IT service segment, forecast to increase by 9% as compared to 2021 (see table 2). Cloud based software consumption will be one of the biggest contributor towards the 15% growth in software segment in India whereas the pent-up demand for data center technologies will bring 4% growth to the data center segment in 2022.

Table 2. India IT Spending Forecast 2020 – 2023 (Millions of U.S. Dollars)

 

2021

Spending

2021 Growth (%)2022 Spending2022 Growth (%)2023 Spending2023 Growth (%)
Communication Services24,1104.824,6682.325,3812.9
Data Center Systems3,67217.13,8805.74,0674.8
Devices44,35423.246,0283.847,5503.3
IT Services18,19911.319,8539.121,8209.9
Software9,39619.710,81715.112,47715.3
Total99,73115.5105,2465.5111,2955.7

Source: Gartner (January 2022)

“This will be particularly poignant with cloud as it serves as a key element in achieving digital ambitions and supporting hybrid work,” said Lovelock. “Gartner expects the vast majority of large organizations to use external consultants to develop their cloud strategy over the next few years.”

In 2020, within the enterprise application software market, the cloud market became larger than non-cloud market for the first time, due in part to the coronavirus pandemic. By 2025, Gartner expects it to be double the size of the non-cloud market. Cloud is responsible for nearly all the 11% spending growth within the enterprise software segment in 2022 as organizations focus on upgrading their software stack to software-as-a-service (SaaS) to support continued flexibility and agility.

More detailed analysis on the outlook for global IT spending is available in the Gartner webinar “IT Spend Forecast, 4Q21 Update: Where Next?” 

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

SMEStreet Edit Desk

SMEStreet Edit Desk is a small group of excited and motivated journalists and editors who are committed to building MSME ecosystem through valuable information and knowledge spread.

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