IT spending to grow at a slower pace in 2022, forecasts Gartner

IT spending in 2022 will grow at a much slower pace than in 2021, according to a forecast by Gartner Inc. The firm said that worldwide IT spending is expected to grow to $4.5 trillion in 2022, up 3 percent from 2021. The reduction in pace is due to the cutbacks in spending on PCs, tablets, and printers, it said. Spending on devices has shrunk 5 percent, it said.

For 2023, Gartner forecast that IT spending will grow by 6.1 percent. It expected the most growth in spending in software (11.8%), followed by IT services (8.3 percent), data center systems (4.4 percent), devices (3 percent), and communication services (2.8 percent).

Despite inflation being a concern, the firm’s research vice-president John-David Lovelock said current levels of volatility in both currency exchange rates and inflation is “not expected to deter CIOs’ investment plans for 2022”.

“Organisations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term,” he said.

Gartner Inc said price increases and delivery uncertainty have quickened the transition in purchasing preference from ownership to service. This, in turn, pushed cloud spending growth to 18.4 percent in 2021, and is expected to grow 22.1 percent in 2022. Cloud service demand has also spurred spending on servers, it said.

The forecast for data center systems spending shows the strongest growth in 2022 — at 11.1 percent.

IT spending is also being affected by the current labour market, Gartner said, but the skills shortage worldwide is expected to abate by the end of 2023 as drive to complete digital transformation slows, and also allows for enough time to upskill and reskill staff.

CIOs will have to balance increased IT demand with falling IT staffing levels, it said.

However, in the near term, CIOs will be forced to take action to balance increased IT demand and dwindling IT staffing levels.

Gartner said that compensation is the primary driver for talent attraction and retention, and technology service providers are increasing prices on IT to allow for competitive salaries. This, in turn, is leading to an uptick in spending in software and services through 2022 and 2023.

“Additionally, CIOs are using more IT services to assist in the lack of skilled IT staff. Tasks that require lower skill sets tend to be outsourced to managed service firms to alleviate staff time, while critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,” said Lovelock.