GenAI to Drive IT Spending in 2024 and Beyond

Worldwide IT spending is expected to total $5.06 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner. This is an increase from the previous quarter’s forecast of 6.8% growth and puts worldwide IT spending on track to surpass $8 trillion well before the end of the decade.

There is an 8% increase in worldwide IT spending indicates a continued emphasis on technology adoption and innovation across various sectors. Factors such as digital transformation initiatives, increasing importance of cybersecurity, expansion of cloud computing services, and investments in emerging technologies like artificial intelligence and IoT could be contributing to this growth. It's a promising sign for the tech industry, and suggests a continued reliance on technology to drive business success and societal advancement.

Enterprises are quickly falling behind IT service firms in terms of attracting talent with key IT skill sets. This creates a greater need for investment in consulting spend compared to internal staff. We are at an inflection year for this trend, with more money being spent on consulting than internal staff for the first time.

In 2024, software spending in India is projected to record the highest growth rate of 18.6%. Indian CIOs are continuing to prioritize growth, customer experience, and operational efficiency while leveraging software assets in this challenging environment. Recurring revenue models are playing a significant role in optimizing IT costs and driving software spending. Additionally, Gen AI is bringing a renewed sense of optimism by unlocking new opportunities for growth and innovation.

Secondly, the average lifespan for mobile phones is shortening and consumers and enterprises are replacing mobile phones earlier. This change allows device spending to achieve $688 billion in spending during 2024, up from 2023 spending lows of $664 billion, which will represent a 3.6% growth rate. The integration of GenAI capabilities in premium and basic phones sustains, more than drives, this change.

Furthermore, devices spending is expected to jump from -2.1% in 2023 to 16.9% in 2024. This is mainly because Indian consumers expect to increase their spending when replacing their mobile phones and other devices this year.

Dr. Deepak Kumar Sahu, President & CEO, VARINDIA