Forecasts 2023-2024: investments in IT software and services drive the IT market
Global spending in the IT market will be $4.7 trillion in 2023, an increase of 4.3% from the previous year. This is what Gartner said in a forecast a few days ago[1].
The relative increase in spending next year will more than double: 8.8%, for a total of $5.1 trillion. The spending items that will drive this considerable increase, given the inflationary period and the contraction of investments in many industries, are Software (+13.5% in 2023 and +14% in 2024) followed by IT Services (8.8% in 2023 and 11.6% in 2024).
Spending in the IT market (in millions of dollars) - forecasts 2023-2024 (Source: Gartner) -
According to Gartner, the increase in spending derives from the continuous loss of IT talent that CIOs are facing, as we have already seen the impact of the lack of expert developers on digital transformation, which leads to the choice to invest in efficient automation systems, such as Low-Code platforms, to be able to undertake or continue along the digital transformation path with fewer resources.
However, perhaps the most interesting data is the trend of Gartner forecasts in the IT market from January to today: in january[2], the total increase in spending expected for 2023 was 2.4%; in April[3], it was 5.5% for 2023, and 8.6% for 2024; and, in July[4] growth forecasts give 4.3% for 2023 and 8.8% for 2024.
The relative figure for 2023 has been revised downward due to the contraction of expenses in data centers and, more specifically, for devices, as consumers are facing an increase in hardware costs, caused by inflation, which leads to the choice of a reduction in spending.
The absolute data are even more evident: if a total expenditure of $4.5 trillion was expected in January, it was seen to rise to 4.6 in April, and it is 4.7 trillion as of today.
As can be seen by comparing the tables, these data are driven upward by the increase in spending on software, which, if expected to increase by 9.3% in January, was 12.3% in April, up to 13.5% in July.
You might think that the increases in spending are the natural consequence of the increase in prices by the vendors, caused by the higher costs they are facing in this period of inflation. However, projected increases in software investment are 6.5 points higher than the global inflation of 7% in 2023 and the expected 4.9% in 2024[5]. This means that there is a real increase in software investment by the companies.
These forecasts suggest that, despite the period of economic turbulence, the increase in the cost of money, and the consequent contraction of investments in many other sectors, globally we are still in the midst of the digital transformation (which certainly has different speeds depending on the country). Spending on processes digitization and automation systems is a priority for CIOs, who will increase investments this year and in 2024, to increase productivity and not risk losing their position in a digital market that increasingly requires development efficiency.
The use of WebRatio Platform could be the optimal investment solution due to the simplicity of Low-Code development, which solves the lack of IT talent described by Gartner, but above all due to the combination of an increase in x7 development productivity and a pricing policy that requires less than half of the expense for a junior resource. The meeting of these two factors leads to a productivity–price ratio that has no comparison in the Low-Code platform market
Sources
[5] https://www.imf.org/external/datamapper/PCPIPCH@WEO/WEOWORLD