Worldwide IT spending on slowing downward trend in 2023 - IDC

Resellers that still derive much of their revenue from on-premise infrastructure and PCs 'will face difficult market conditions this year' says IDC VP Stephen Minton

IT spending worldwide is on a downward trend as technology investments continue to show the impact of a weakening economy, according to the International Data Corporation (IDC).

In its new monthly forecast for worldwide IT spending growth, IDC projects overall growth this year in constant currency of 4.4 per cent to $3.25tn.

This is slightly down from 4.5 per cent in the previous month's forecast and represents a swing from a 6.0 per cent growth forecast in October 2022.

"Since the fourth quarter of last year, we have seen clear and measurable signs of a moderate pullback in some areas of IT spending," said Stephen Minton, vice president in IDC's data & analytics research group.

"Tech spending remains resilient compared to historical economic downturns and other types of business spending, but rising interest rates are now impacting capital spending."

After reductions to PC forecasts a month ago, IDC has now scaled back its expectations for some additional hardware categories including servers, wearable devices, and peripherals.

Forecasts have been reduced for on-premise infrastructure investments by enterprise buyers, while cloud and service provider deployments remain more resilient overall.

Service provider spending is still weakening from last year's highs as the industry adjusts to slower post-COVID growth, but planned investments by cloud and hyperscale providers have broadly held up since last month.

Strong demand for cloud services continues to drive growth despite inflationary pressures but non-cloud spending is set to decline.

Worldwide cybersecurity spending, however, is set to continue on its growth spur - earlier this year IDC predicted it would grow in 2023 by 12.1 per cent.

For the first time, this month's Worldwide Black Book forecast includes channel splits in the March 2023 update.

This shows that while direct IT spending is expected to grow by 6.4 per cent overall in 2023, indirect spending through channel providers will increase by just 2.5 per cent as credit tightening affects smaller businesses and consumers in their ability to fund technology investments.

"Resellers that still derive much of their revenue from on-premise infrastructure and PCs are facing difficult market conditions this year," said Minton.

"Meanwhile, cloud infrastructure, software, and services are growing more slowly than a year ago but continue to account for a larger share of total IT spending and are reinforcing the general sense of resilience which the industry still enjoys."