Worldwide technology spending will surpass $5 trillion for the first time in 2024, up 8% over this year, according to new Gartner Inc. research published today.

Gartner releases a forecast of the coming year’s information technology spending levels every October. According to the research firm, its projections draw on data from more than 1,000 IT suppliers.

Gartner estimates that IT spending will climb 8% year-over-year, to about $5.1 trillion, in 2024. That means the industry is on track to more than double the 3.4% growth rate it’s expected to achieve in 2023. This year’s relatively slow growth is the result of multiple factors, including an ongoing slowdown in consumer device purchases.

The demand slump began in 2022. During last year’s holiday season, International Data Corp. recorded the largest-ever drop in worldwide smartphone sales. Handset shipments plunged 18.3% year-over-year, to about 300 million units. The following quarter, Gartner observed an even larger 29% decline in personal computer sales.

According to the new market forecast Gartner released today, device spending will start growing again in 2024. This year, demand is expected to decline by about 10%. From there, the market will grow 4.8% year-over-year in 2024 to reach $722.47 billion.

The data center systems segment has likewise experienced significant demand fluctuations over the past two years. In 2022, the market expanded 19.7% on a year-over-year basis to $227 billion. This growth rate will decelerate to 4.7% in 2023, Gartner projects, before more than doubling to 9.5% during 2024. That puts the segment on track to top $260 billion next year.

The software market has followed a more predictable pattern in recent years. According to Gartner, software spending will climb 13.8% in 2024 on a year-over-basis to just over $1 trillion. Spending grew by 12.9% last year and by 10.7% in 2021.

The two largest markets covered in Gartner’s annual IT spending forecast are the IT services and communications services segments. The former market is set to grow 10.4% next year to about $1.3 trillion. Spending on telecommunications services, meanwhile, is expected to reach $1.42 trillion thanks to an expected 3.3% jump in purchases.

In its forecast, Gartner pointed to cybersecurity and cloud computing as two major drivers of IT spending growth. The firm estimates that, despite the broad industry interest, generative artificial intelligence has not yet made a “material impact” on IT spending. But that could change in the not-too-distant future. 

“In 2023 and 2024, very little IT spending will be tied to GenAI,” said Gartner research vice president John-David Lovelock. “However, organizations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps. The hype around GenAI is supporting this trend, as CIOs recognize that today’s AI projects will be instrumental in developing an AI strategy and story before GenAI becomes part of their IT budgets starting in 2025.”

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