Dive Brief:
- Software and IT services will capture more than two-thirds of global tech spending by 2027, Forrester projects. In the U.S, the two categories will total 60% of IT spending in 2027, up from just over 50% in 2018.
- Enterprise and government investments in technology will help propel global IT spend to $4.7 trillion this year, a 5.3% increase over 2023, Forrester said.
- In the U.S., growing demand in the markets for cloud, cybersecurity, generative AI and digital economy technologies will drive year-over-year growth of 5.5% this year, according to Forrester. The analyst firm expects financial services and healthcare to accelerate tech spend faster than companies in retail, manufacturing, transportation and logistics.
Dive Insight:
Lower energy prices, declining inflation and a return to stable supply chains will lift the spending constraints that plagued IT budgets last year, when analysts had to dial back forecasts.
While Forrester anticipated 4.7% growth in the global market in 2023, last year saw just shy of a 4% year-over-year increase, the report said.
As the macro picture brightens, PC vendors are anticipating a delayed device refresh cycle to lift shipments out of a two-year slump. “The switch to Windows 11 will improve computer equipment sales in 2024 and 2025 after a calamitous few years for desktop and notebook manufacturers,” Forrester said.
The emerging market for generative AI tools will also drives spend, the report said. Forrester expects enterprise investments in the technology to reach $227 billion by the end of the decade, growing at a rate of 36% annually.
Gartner tempered its IT spending forecast for the year earlier this month, trimming roughly $100 billion from its prior projection. Nevertheless, the analyst firm expects global spend to top $5 trillion for the first time, a 6.8% increase over 2023’s $4.7 trillion.
