Dive Brief:
- Worldwide IT spending will grow more than 5% this year, reaching almost $4.5 trillion, Gartner projects, as companies pivot from pandemic-induced reactive spending to long-term projects.
- While enterprise software will remain the highest growth area, companies are heavily investing in IT services, resulting in almost 8% growth this year. Business and technology consulting investments, expected to rise 10%, will drive the category in 2022.
- Overall, Gartner expects services spending to reach almost $1.3 trillion, representing more than one-quarter of global IT spend. Communications services, the largest category and responsible for almost one-third of IT spend, is expected to continue its slow-growth trajectory, up only 1.3% this year.
Dive Insight:
Businesses are focusing on multiyear projects in 2022, as companies move away from 2020's turnkey technology projects and 2021 efforts to fix and pad the technology stack.
"If 2022 is anything, it's that return to the future, return to the long-term view," said John-David Lovelock, distinguished research vice president at Gartner. For the first time in two years, businesses are approving projects with three to five year timelines.
The trouble lies in organizations' ability to execute projects. With talent scarce, companies require more managed services and outsourcing.
Managed services — which includes running printers, mainframes or applications — is seeing strong growth, Lovelock said. While AI and automation reduce the price of managed services and consulting, total spend in the category is rising because organizations are signing more deals.
With services handling the day-to-day, CIOs can shift internal employees to other projects and upskill staff, Lovelock said.
Gartner's growth projections echo what other research firms are expecting: Enterprises will spend more on technology this year.
Info-Tech Research Group surveys CIOs and their direct supervisors to understand C-suite alignment. Two in five CIOs and CxOs expect the IT budget to increase between 6%-15% in the next three to five years, the research firm's data shows.
Business process improvement, digital transformation and modernization lead CIO priorities this year, Info-Tech found.
Disrupted operating models are driving IT spending, as companies rethink how they use tools to reduce work friction, said Brian Jackson, research director, CIO practice at Info-Tech Research Group. "If you want to run your business in 2022, you're going to have to invest more in technology."
Tool friction is represented in how companies use meeting solutions. With the workforce distributed between a remote, in-person or hybrid setting, companies are still triaging how to best collaborate. Yet it's difficult to forecast potential pain points or troubleshoot meeting hiccups across mixed mediums.
"What ends up happening is no standard is set and people are just left to figure it out on their own," Jackson said. "People will go to the path of least resistance, which is just continuing the remote model of meetings."
Organizations are prioritizing security, too, as third-party vulnerabilities create urgency around software supply chain security and visibility, as seen in December's Log4j vulnerability.
Gartner expects security spending to grow 11% this year across all the markets and partners it tracks.
"It's not enough to spend on prevention methods anymore," Jackson said. Companies need to learn how to detect and mitigate threats, which requires a different class of security solutions, especially because there's no defense for zero day attacks.
