IT services to take the spotlight in 2024 - Gartner

For the first time IT services is expected to become the largest segment of global IT spending

Worldwide IT spending is forecast to grow 6.8 per cent to $5tn this year, according to Gartner's latest prediction.

In the UK, the analyst firm expects 2024 growth of 6.8 per cent in constant currency and 9.2 per cent CAGR.

Leading markets will be Infrastructure-as-a-Service (IaaS), infrastructure software and enterprise software.

Globally, IT services will become the largest segment of IT spending for the first time, with expected growth of 8.7 per cent in 2024, reaching $1.5tn.

By Gartner's definition, IT services includes consulting and implementation, implementation of software and infrastructure, services around software and infrastructure, business process outsourcing services, and IaaS.

Explaining to CRN what is driving growth in IT services, distinguished Gartner VP analyst John-David Lovelock says the consumer market has become "fully penetrated" with the majority of people already owning phones, laptops, tablets and printers.

Enterprises, however, have not yet hit that plateau for adoption penetration of IT.

"While we are nowhere near plateauing on adoption rates for IT, with the new technology that has come on board with cloud and artificial intelligence and distributed computing and edge computing, we continue to expand how much IT is out there.

"As we expand IT, services expand and software expands. So those two markets becoming the largest market that Gartner tracks is more inevitable than surprising."

GenAI doesn't make the list

One segment of tech that might seem like a key ingredient in global spending is missing from Gartner's table - generative AI.

While GenAI had major hype in 2023, it will not significantly change the growth of IT spending in the near-term.

"CIOs are going to have the same amount of money to spend. The question for them will be what do they spend it on, the usual question," Lovelock explains.

"There will be a little bit of robbing Peter to pay Paul. There are things they won't be doing in order to allow them to do GenAI.

"But it's still too early for most businesses to be behind generative AI because there's not a lot of products on the market yet."

Lovelock echoes what he told CRN in November that 2023 was the story, 2024 will be about planning, and 2025 will be the year products are rolled out.

"There is money to be made this year, particularly by IT services firms who can help organisations become better at GenAI and formulate their plan."