IT spending to spike eight per cent in 2024 as genAI drives datacentre growth - Gartner

Global IT spending is projected to hit $5tr in 2024 as IT services to become largest segment

Global IT spending is set to reach $5.1tr (£4.1tr) in 2024, up eight per cent on 2023, a recent Gartner forecast found.

The new forecast shows an uptick from the previous quarter's predicted 6.8 per cent growth, putting worldwide IT spending on pace to soar past the $8tr mark well before 2030 rolls around.

"With spending on IT services on track to grow by 9.7 per cent to eclipse $1.52tr, this category is on pace to become the largest market that Gartner tracks," said John-David Lovelock, distinguished VP analyst at Gartner.

"Enterprises are quickly falling behind IT service firms in terms of attracting talent with key IT skill sets. This creates a greater need for investment in consulting spend compared to internal staff.

"We are at an inflection year for this trend, with more money being spent on consulting than internal staff for the first time."

In an earlier forecast this year, Gartner also found that IT services was expected to become the largest segment of global IT spending for the first time with leading markets including Infrastructure-as-a-Service (IaaS), infrastructure software and enterprise software.

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

A shift towards genAI

Spending on datacentre systems is expected to spike, with growth rates jumping from four per cent in 2023 up to 10 per cent in 2024.

A major driving force behind this surge is all the planning happening around generative AI.

"We are seeing a cycle of story, plan, execution when it comes to genAI. In 2023, enterprises were telling the story of genAI and in 2024 we are seeing most of them planning for eventual execution in 2025," said Lovelock.

"Technology providers are required to be a step ahead of this cycle and are already in the execution phase. They are bringing GenAI capabilities to existing products and services, as well as to use cases being identified by their enterprise clients.

"There is also gold rush level spending by service providers in markets supporting large scale GenAI projects, such as servers and semiconductors," said Lovelock.

"In 2024, AI servers will account for close to 60 per cent of hyperscalers' total server spending."