Research firm Gartner forecasts worldwide IT spending to increase 3% this year, however at a much slower pace than in 2021. Spending cutbacks on PCs, tablets and printers by consumers and spending on devices is projected to shrink by 5%.
John-David Lovelock, a distinguished research vice president at Gartner, says inflation and currency exchange rates are not expected to deter CIOs’ investment plans for 2022. “Organizations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term,” said Lovelock, in a statement.
With price increases and delivery uncertainty, CIOs, and enterprises in general, are shifting from ownership to service models. In 2021, there was 18.4% growth in cloud spending. In 2022, cloud spending is expected to grow 22.1%. Gartner says the cloud service demand is reshaping the IT service industry, but it is also driving spending on servers as hyperscalers build out their data centers.
Spending on data center systems is expected to have the strongest growth of all segments in 2022, according to Gartner. Cloud consulting and implementation and cloud managed services are expected to grow 17.2% in 2022, from $217 billion in 2021 to $255 billion in 2022, helping to drive the overall IT services segment to 6.2% growth in 2022.
IT Talent Shortage Affects IT Spending
Gartner predicts the IT skills shortage to ease by the end of 2023. By that time, the corporate drive to complete digital transformation will slow down, leaving time for more upskilling and reskilling of existing staff. However, Gartner notes in the near term, CIOs will be forced to take action to balance increased IT demand and dwindling IT staffing levels.
Gartner’s Global Labor Market Survey in the first quarter of 2022, showed compensation as the number one driver for IT talent attraction and retention. Tech service providers are increasing prices to allow for competitive salaries; in turn, thus will driven an increase in spending in software and services through this year and next year. Gartner says worldwide software spending is expected to grow 9.6% to $806.8 billion in 2022 and global spending on IT services is forecast to reach $1.3 trillion.
“Additionally, CIOs are using more IT services to assist in the lack of skilled IT staff. Tasks that require lower skill sets tend to be outsourced to managed service firms to alleviate staff time, while critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,” said Lovelock.
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