We are spending $5.26 trillion on IT worldwide this year. A significant portion of these expenditures comes from generative AI, which particularly increases investments in data center systems.
Source: DataNews
Market analyst Gartner provides market expectations every three months. This makes it a reliable indicator for the digital economy and the confidence of IT decision-makers in the future. Earlier this year, Gartner forecasted 8% growth for 2024, which has now been slightly adjusted to 7.5% compared to 2023.
However, this is not an indication that things are suddenly getting worse. Compared to 2023, growth is expected in every segment, except for ‘communication services,’ which is expected to grow by only 3.0%, following the same trend as last year.
While Gartner’s figures generally show growth or slight declines of a few percentage points, sometimes exceeding ten percent, it now states that spending on Data Centre Systems will increase by 24.1%. In 2023, the growth was 4.0%.
Worldwide IT Spending Forecast (Millions of US Dollars)
| 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | |
| Data Centre Systems | 236,098 | 4.0 | 293,091 | 24.1 |
| Devices | 692,784 | -6.5 | 730,125 | 5.4 |
| Software | 974,089 | 11.5 | 1,096,913 | 12.6 |
| IT Services | 1,503,698 | 4.9 | 1,609,846 | 7.1 |
| Communications Services | 1,491,733 | 3.2 | 1,537,188 | 3.0 |
| Overall IT | 4,898,401 | 3.8 | 5,267,163 | 7.5 |
Source: Gartner (July 2024)
In absolute expenditures, this amounts to slightly more than $293 billion. As a result, data center systems are still the smallest segment among the five major components (alongside Devices, Software, IT Services, and Communications Services), but they are the fastest growing. Outside of this, only software (+12.6%) can post double-digit growth in expenditures.
AI-taks
But for software players, spending on Gen AI does not exclusively mean extra profit. “Some software expenditures are attributed to Gen AI, but for a software company, you can compare Gen AI to a tax. The revenue increase from selling Gen AI additions or tokens flows back to their AI model provider partner,” says John-David Lovelock, distinguished VP Analyst at Gartner.
It’s different for pure data center expenditures. “The demand for computing power for Gen AI is felt throughout the data center, and spending in that segment reflects this immense demand,” says Lovelock.
Change Fatigue
Expenditures for IT Services, which at $1.6 trillion this year is the largest segment, are growing by 7.1%. Gartner notes here that it has adjusted its expectations, previously anticipating 9.1% growth. The analyst firm observes that there is less spending on consulting and business process services.
It attributes this to “change fatigue” among CIOs, a phenomenon it noted earlier this year and which is lasting longer than expected. As a result, many contracts, even those dating back to the second half of 2023, are on hold. However, Gartner is confident that there will be a recovery by the end of this year.
