Worldwide IT spending is expected to hit US$4.5 trillion in 2022, an increase of three percent from 2021, according Gartner.
The pace of growth will be hindered by spending cutbacks on PCs, tablets and printers by consumers, causing spending on devices to shrink five percent, as well as a shortage of IT talents..
“Inflation is top of mind for everyone. Central banks around the world are focusing on fighting inflation, with overall inflation rates expected to be reduced through the end of 2023. However, the current levels of volatility being seen in both inflation and currency exchange rates is not expected to deter CIOs’ investment plans for 2022,” said John-David Lovelock, Distinguished Research Vice President of Gartner.
Price increases and delivery uncertainty, exacerbated by the Russian invasion of Ukraine, have accelerated the transition from ownership to service — pushing cloud spending from 18.4 percent growth last year to an expected 22.1 percent rise in 2022.
Cloud service demand is not only reshaping the IT services industry, but also driving spending on servers to 16.6 percent growth in 2022, as hyperscalers build out their data centres.
Spending on data centre systems is forecast to experience the strongest growth of all segments in 2022 at 11.1 percent. Cloud consulting and implementation and cloud managed services are expected to grow 17.2 percent in 2022, from US$217 billion in 2021 to US$255 billion in 2022, helping to drive the overall IT services segment to 6.2 percent growth in 2022.
Talent crunch
The IT labour market remains tight, making it difficult to attract and retain talent. CIOs will need to balance increased IT demand and dwindling IT staffing levels. However, that shortfall should ease by end 2023 with unskilling and reskilling of existing staff and when digital transformations slow down.
Technology service providers are increasing prices on IT to allow for competitive salaries. This is driving an increase in spending in software and services through 2022 and 2023. Worldwide software spending is expected to grow 9.6 percent to US$806.8 billion in 2022 and global spending on IT services is forecast to reach US$1.3 trillion.
“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.
Photo: Polina Zimmerman
Entelechy Asia 