Forecasts predict that global IT spending will reach a staggering $5.06 trillion in 2024, representing an 8% increase from 2023, as revealed by recent data from Gartner. These predictions indicate that global IT spending could exceed $8 trillion well before the decade ends.
The expenditure on data center systems is anticipated to experience a significant surge. In 2023, global spending on data center systems witnessed a 4% growth. However, Gartner estimates a potential 10% growth in 2024, majorly influenced by planning for generative AI, as stated by John-David Lovelock, the distinguished vice president analyst at Gartner.
Lovelock explains the GenAI process as a cycle of story, planning, and execution. In 2023, enterprises narrated the tale of GenAI, and most of them are expected to plan for its ultimate execution by 2025. He asserts in a published statement that technology providers are urged to stay ahead of this cycle and are already in the phase of executing it. They are incorporating GenAI functionalities into existing products and services and addressing use cases identified by their enterprise clients.
GenAI-related expenditure also impacts the service provider market. Lovelock declares a gold rush level of spending by service providers in markets that support large-scale GenAI projects, such as servers and semiconductors. He asserts that in 2024, AI servers will contribute nearly 60% to the total server spending by hyperscalers.
Beyond the influence of AI, Gartner has discovered that there is an upswing in software and IT services expenditure too, with projected growth of 13.9% and 9.7%, respectively.
“As IT services expenditure is projected to increase by 9.7% and surpass $1.52 trillion, this facet is shaping up to emerge as the most expansive market that Gartner surveys,” indicated Lovelock.
He made a connection between IT services expenditure and challenges in enterprise recruitment: “Companies are swiftly lagging behind IT service firms in the race to draw talent possessing crucial IT competencies. This heightens the demand for investments in consulting as opposed to in-house personnel. We are witnessing a pivotal year for this trend, with consulting expenditure overtaking that of internal staff for the first instance.”
The IT expenditure forecast by Gartner mentions the effects of genAI implementations. Similarly, the Dell’Oro Group’s recent study found that AI workloads, crucial to the mission, will propel investments in speeded-up computing for private data centers.
Dell’Oro Group forecasts that in 2027, more than a quarter of data center switch ports sent to large corporations will have a speed of 400 Gbps or above, a sharp increase from the 9% seen in 2022. The uptake of these high-speed interfaces will be propelled by AI and High-Performance Compute (HPC) applications, according to the research group.
