Governments globally will spend more than $500bn on IT this year - Gartner

The analyst claims XaaS will emerge as new area of investments as governments scale digital transformation initiatives

Global government IT spending is predicted to total $565.7bn (€539.5bn) in 2022, an uptick of five per cent from 2021, according to research from Gartner.

Spending is forecast to increase across all segments apart from internal services and telecom services.

The analyst estimates software to record the strongest growth across all segments this year.

It added that as legacy modernisation continues to be a priority in government organisations, growth in the datacentre systems segment will continue to slow though the forecast period.

"The last few years of enduring pandemic challenges have mobilised a wave of digital transformation activities in government organisations across the world," said Gartner director analyst, Daniel Snyder.

"Governments are executing innovative activities by harnessing technology to streamline digital services, advance automation processes and evolve citizen experiences."

The research firm claims governments continue to invest in critical application software that directly support end user interfaces driving strong growth in this segment.

Spending on telecom services is set to decrease in 2022 as governments reduce spending on expensive legacy systems in favour of digital service delivery models, Gartner said.

Xaas on the up

Anything-as-a-Service (XaaS) is gaining popularity across government organisations as it provides better return on investment normalising IT spend over time making budgeting for IT more predictable, while avoiding the accrual of technical debt, according to Gartner's research.

It predicts that by 2026, most government agencies' new IT investments will be made in XaaS solutions.

"The pandemic sped up public-sector adoption of cloud solutions and the XaaS model for accelerated legacy modernization and new service implementations," Snyder added.

"Fifty-four percent of government CIOs responding to the 2022 Gartner CIO Survey indicated that they expect to allocate additional funding to cloud platforms in 2022, while 35 per cent will decrease investments in legacy infrastructure and datacentre technologies."
With the ongoing talent challenges facing organisations, XaaS makes it easier for government organisations to find the right talent via XaaS operating models.

XaaS delivery models require different internal IT skill sets and place less demand on the organisation to develop or acquire emerging IT skills, which are often hard to find and difficult for governments to afford.