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Gartner expects spending to reach a total of $4.5 trillion in 2023, slightly down from its previous forecast.

According to Gartner, the revision is not a reflection of a decline in enterprise IT spending, but rather the result of a strengthened US dollar and a decrease in demand for consumer devices. In constant-currency terms, growth is expected to be a robust 5.4 percent.

Spending on datacenter systems, which saw a significant increase of 12 percent in 2022, is expected to slow this year, with growth forecasted to fall to just 0.7 percent.

In contrast, spending on software is expected to soar by 9.3 percent, with IT services growing at a steady 5.5 percent. Overall, though, IT spending is expected to be impacted by a decline in device spending, as more buyers than anticipated have chosen to retain their current devices rather than replace them this year.

Inflation impacts purchasing power

“Inflation has gotten into the lower middle class and taken away purchasing power”, said Gartner Vice President John-David Lovelock.

 Many people who purchased devices during the early days of the COVID-19 pandemic see no compelling reason to replace them right now, he said. Nevertheless, global device sales of $685 billion reflect the importance of phones and tablets to the overall spending picture.

Steady spending

The slowdown in spending on datacenter systems should not be interpreted as a sign that large on-premises computing environments are becoming obsolete. “It is not shrinking,” Lovelock said. “Enterprises are continuing to spend what they need to run a data center and on-premises software.”

Hyperscalers and large data center operators went on a spending spree in 2022, but they’re not expected to continue that pace this year. “The level of spending in 2022 was an aberration”, according to Lovelock.

Spending on cloud-based software is expected to grow by 17 percent, with infrastructure-as-a-service increasing by over 30 percent. “Things are great in the IT world”, Lovelock asserted. “Every country we’re tracking is seeing growth. Overall, IT spending is absolutely recession-proof.”

Tip: Rise in UK public sector IT spending raises concerns