Global IT spending will hit $4.6 trillion in 2023, says research house Gartner.
The company described the enterprise IT sector as “recession-proof” as business leaders look to innovate and automate their way out of trouble and use digital transformation to trim operational expenditure.
“CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others”, he added, “but it is not projected to materially impact the overall level of enterprise technology spending.”
Gartner’s report comes as Deloitte’s quarterly CFO study (which included input from the CFOs of 23 FTSE 100 and 30 FTSE 250 companies) this week revealed that over half (55%) of UK CFOs have tilted to defensive strategies, with cost reduction and cash control as their top two priorities – although that does not rule out increases in IT spend that drive efficiencies. UK CFOs were understandably not optimistic about the state of the British economy, with an overwhelming majority (91%) expecting operating margins for UK corporates to decline over the next 12 months — that’s the highest reading on record except at the beginning of the pandemic.
|2021 Spending||2021 Growth (%)||2022 Spending||2022 Growth (%)||2023 Spending||2023 Growth (%)|
|Data Centre Systems||189,506||6.1||209,190||10.4||216,262||3.4|
Gartner’s research comes after its own July 2022 survey of 200 CFOs found that 69% plan to increase their spend on digital technologies, while the 2023 Gartner CIO and Technology Executive Survey found that CIOs are being tasked with accelerating time to value on digital investments – shiny new things are out, ROI is in.
“Companies will use digital technology primarily to reshape their revenue stream, adding new products and services, changing the cash flow of existing products and services, as well as changing the value proposition of existing products and services,” said Lovelock in today’s IT spending in 2023 report. “This trend has fed the shift from buying technology to building, composing and assembling technology to meet specific business drivers.”
The findings come after Morgan Stanley CEO James Gorman said technology was the fastest growing part of his firm, tellling analysts that “that’s good because it’s displacing things… which we shouldn’t be doing manually.