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Gartner’s 2024 IT Forecast: The GenAI Revolution Sparks Spending Surge

$5.06 trillion.
Emily Hill
Contributing Writer
Blue arrow pointing upwards on light blue background with many smaller arrows behind it represent growth or progress Generative AI

In an unprecedented surge reflective of a promising digital era, worldwide IT spending is expected to reach a staggering $5.06 trillion in 2024, up 8% from the previous year and surpassing 2024’s Q1 prediction.

This forecast from Gartner’s latest report, highlights not just a quantitative increase but also a qualitative shift in the industry’s approach to investment, particularly in the realms of data center systems, devices, and IT services—all influenced by the advent of generative AI (GenAI).

Data Center Systems: Leading the Charge with GenAI:

The projection for data center systems indicates a growth spurt from $236.179 billion in 2023 to $259.680 billion in 2024, showcasing a 10% increase. This sector is rapidly gearing up for the heavy computational demands of GenAI applications, which require a strong infrastructure capable of processing vast datasets and complex algorithms.

The growth rate reflects a proactive approach within the industry to build data centers that are not only more powerful but also more energy-efficient and scalable to handle the data-intensive tasks that GenAI brings.

IT Services: The Rising Demand for Expertise

IT services are witnessing a remarkable surge, as evidenced by an expected growth to $1.52 trillion in 2024. This 9.7% increase suggests that companies are aggressively seeking out external IT consulting services to access specialized skill sets that are in short supply internally.

The shift in spending priorities from internal staffing to external consulting is indicative of a strategic realignment, with companies preferring to pay for on-demand expertise that can guide complex projects, particularly those involving new technologies like GenAI, rather than expanding their permanent workforce.

Devices: The Impact of Innovation on Spending

Despite the previous year’s decline, device spending is set to rise to $687.943 billion in 2024. Behind this 3.6% increase is a consumer and enterprise market that is being influenced by shorter technology life cycles and the introduction of new features, such as those offered by GenAI.

These AI-enhanced features are driving the early replacement of devices, with consumers and businesses eager to leverage the new capabilities provided by GenAI, such as advanced analytics, improved user interfaces, and personalized experiences.

Software and Communications Services: Sustained and Expanding Growth

Software spending is soaring, anticipated to cross the $1 trillion threshold with a growth rate of 13.9%. This jump is fueled by the increasing demand for new software applications that are inherently more complex, integrating AI capabilities, and offering more personalized and efficient user experiences. This sector’s expansion is also being driven by the enterprise sector’s growing need for digital transformation solutions and cloud-based services that offer flexibility and scalability.

Communications services are not far behind, with a solid 4.3% growth. The steady increase here is reflective of the foundational role that connectivity plays in both the consumer and business realms, with the proliferation of IoT, increased mobile usage, and the need for reliable, high-speed internet services across all areas of life.

The Wrap

Gartner’s detailed forecast depicts an IT industry at the threshold of significant change, propelled by GenAI technology adoption across different sectors. With data center systems ramping up for GenAI, IT services increasingly being outsourced for expertise, and device spending recovering with advanced AI features, the foundation is laid for enduring growth and innovation.

For CIOs and tech executives, these trends offer both challenges and opportunities, demanding strategic planning to transform IT spending into a pivotal investment for an agile, intelligent enterprise. This trend indicates a new age where IT spending is set to redefine the business and technological spheres, underpinning the industry’s evolution over the coming years.

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