Dive Brief:
- Worldwide IT spend will grow less this year than previously expected, Gartner forecast Thursday, dropping 2022’s year-over-year spending growth projections from 5% to 3%. IT spending is expected to reach $4.5 trillion this year, the analyst firm said.
- Inflation concerns aside, CIOs plan to continue spending — though at a much slower pace than in 2021, according to the research firm. A slowdown in device spending drove this contraction.
- With a tight labor market for tech skills, executives are increasing their spending on outsourced service firms, according to John-David Lovelock, distinguished research VP at Gartner. "Critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,” he said in a statement.
Dive Insight:
Spending shifts signal enterprise priorities. With recession fears and inflation as the backdrop, enterprise technology spending trends show the need for companies to continue executing on major projects.
“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.
Context matters when looking at spending trends. CIOs entered 2022 after big recovery efforts in 2021, when companies resumed ambitious and long-term transformation projects. CIO priorities at the start of the year included security spending, emerging technologies, executives told CIO Dive.
But IT talent retention comes at a hefty premium and businesses are turning to outsourcing and managed service firms to deliver on technology goals.
At the same time, enterprise device spending fell out of priority and is on pace to contract slightly by 0.5% in 2022.
"Enterprises are not cutting back" on device spending, said Lovelock in an email. "But there is some hesitancy in buying that will push spending out of 2022 into 2023."
