Global IT spending will be lower than expected in 2024, with the cost of investing in generative AI tools placing a significant burden on businesses – presents Gartner’s latest report. The fatigue that was felt at the beginning of the year, which characterized the CIOs managing the companies’ technology investments, is visibly starting to subside, the willingness to spend is greater again, but technology directors continue to postpone the launch of larger projects.
Over the course of the year, IT market spending will reach $5.26 trillion, which may represent a 7.5 percent increase compared to the previous year – however, this figure falls short of the previously predicted 8 percent. A significant portion of spending will be absorbed by generative AI, especially in data center spending, which is expected to grow by 24 percent in 2024, compared to the previous estimate of 10 percent growth.
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Spending on software will increase by 12.6 percent, and spending on devices will increase by 5.4 percent. Investments in IT services are estimated to grow 7.1 percent, a significant drop from the previous forecast of 9.7 percent, but Gartner said this was to be expected.
According to John-David Lovelock, vice president of Gartner, after the pandemic, large-scale digital transformation initiatives fell under the responsibility of CIOs, who mainly worked with large projects and contracts between 2021 and 2023, and since then have been more cautious, which helps departments to make additional cost savings.
Most software companies do not have the resources or time to develop their own generative AI models, so they source technologies from third parties, and some business users remain uncertain about the added value. Fear of missing out on generative AI is driving hyperscaling into servers, semiconductors and other hardware, with AWS and Microsoft pouring tens of billions of dollars into upgrading and building out data centers. However, software vendors will see only a fraction of the revenue from AI technologies, as most of it will be returned to model providers.
Source: www.hwsw.hu
