Global IT spending in 2023 will hit a record $4.3 trillion, estimates Gartner – up 2.4% from 2022 – with IT consultancies one of the major winners of digital transformation programmes, amid a tight labour market.
That’s despite a turbulent macroeconomic climate triggered by a confluence of external disruptions ranging from interest rate rises, an energy shock triggered by Russia’s invasion of Ukraine and lingering impact from Covid.
From Apollo to Blackrock, Citi to Deutsche: The tech outlook in 2023
John-David Lovelock, Distinguished VP Analyst at Gartner said: “A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities.
“We’ve seen... the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof.”
Those findings are echoed by PwC’s annual CEO survey, published this week, which found that business leaders are looking to innovate and digitalise their way out of what are often existential challenges – 22% of CEOs told PwC they do not believe their business will be economically viable within a decade on their current course.
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Among CEOs investing in technology, the majority are doing so with an emphasis on reinventing, rather than just maintaining, their current business (61% compared to 39%) PwC’s survey found. As Antony Cook, Consulting Partner, PwC UK, put it: “Almost every organisation is feeling an imperative to make changes to secure their long-term future.. at the heart of every change is the need for human insight and experience combined with an understanding of the role technology plays in delivering the right results at speed and scale.”
One example covered just this week by The Stack would be at Citi, one of the world’s largest banks, where despite challenging earnings, executives are ramping IT spending up 6% to a record $13.6 billion this year alone as part of a colossal effort to improve not just controls but the bank's ability to innovate with data.
IT spending in 2023: Software and IT services lead
“The software and IT services segments are projected to grow 9.3% and 5.5% in 2023, respectively,” said Gartner, predicting a 5.1% devices segment slumpas consumers and enterprises lengthen refresh cycles.
The IT services market is set to be a big winner as companies seek implementation and support, the research house suggests, saying spending on consulting is expected to reach $264.9 billion in 2023, up 6.7%.
“IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects” suggests Lovelock.
(This is not a trend that The Stack has encountered in our conversations across the industry and with so many technology startups having made sweeping layoffs, enterprise CIOs are in an unusually strong position to tell a compelling story about their plans and attract staff right now: What are your views? Let us know.)