According to the most recent Gartner estimate, neither inflation nor currency volatility are expected to have a negative effect on CIOs’ investment plans. It is predicted that global IT investment will increase by 3% from 2021 to $4.5 trillion in 2022. Expenditure on cloud services is anticipated to grow by 22.14% in 2022, while spending on data center systems is anticipated to rise by 11.14% in that year.
“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 at Gartner. “Organizations 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.”
Price hikes and supply uncertainty, made worse by Russia’s invasion of Ukraine, have hastened firms’ shift from ownership to service-based purchasing, driving up cloud spending to 18.4% growth in 2021 and an anticipated growth of 22.1 percent in 2022. Demand for cloud services is not only changing the IT services sector, but it is also expected to increase server investment by 16.6 percent in 2022 as hyperscalers expand their data centers.
The greatest growth of any market category is anticipated for spending on data center systems in 2022, at 11.1 percent. From $217 billion in 2021 to $255 billion in 2022, cloud consulting and implementation and cloud managed services are anticipated to expand 17.2 percent, contributing to the total IT services segment’s 6.2 percent growth in 2022.
IT Talent Crunch Affecting IT Spending
By the end of 2023, when the corporate race to complete digital transformations slows down and there has been time for upskilling and reskilling of existing workers, it is anticipated that the critical IT skills shortage experienced worldwide will disappear. However, CIOs will need to take action soon, according to Gartner, to strike a balance between rising IT demand and shrinking IT staffing numbers.
Talent attraction and retention are challenging due to the tightening IT labor market. The most important factor in luring and keeping IT talent, according to the Gartner Global Labor Market Survey of over 18,000 workers conducted in the first quarter of 2022, is remuneration. IT service companies are raising their pricing in order to support competitive pay. Through 2022 and 2023, this will lead to a rise in spending on software and services. Global spending on software is anticipated to increase by 9.6% to $806.8 billion in 2022, while spending on IT services will increase to $1.3 trillion.
“Additionally, CIOs are using more IT services to assist in the lack of skilled IT staff,” said Mr. Lovelock. “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.”
The quarterly IT spending prediction from Gartner offers a distinctive viewpoint on IT spending across the areas of hardware, software, IT services, and telecommunications. These studies aid Gartner customers in understanding market possibilities and difficulties.