Subj : Gartner warns IT spending growth may not be as strong as expected
To   : All
From : TechnologyDaily
Date : Wed Jul 17 2024 10:15:06

Gartner warns IT spending growth may not be as strong as expected  and AI is 
to blame

Date:
Wed, 17 Jul 2024 09:04:20 +0000

Description:
Spending will still rise, but Gen AI "tax" and "change fatigue" hits some 
areas, Gartner says.

FULL STORY
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IT spending across the world will be slightly lower than expected in 2024 as 
the cost of investing in generative AI tools begins to hit businesses 
everywhere, experts have warned. 

A report from Gartner has claimed global IT spending will be affected by the 
widespread desire to jump on the AI bandwagon, but also the lifting of a 
widespread general malaise around technology. 

This "change fatigue" which apparently affected CIO spending earlier in 2024, 
has apparently lifted, with companies now keen to spend again, the firm's 
forecast claimed. Gen AI costs 

Overall, Gartner says it expects worldwide IT spending to hit $5.26 trillion 
in 2024, an increase of 7.5% from 2023. 

However, this is a decrease from the 8% growth predicted in the previous 
quarter - with generative AI investment making up much of the costs, 
particularly in data center spending, which is expected to increase 24% in 
2024. 

Generative AI (GenAI) is being felt across all technology segments and 
subsegments, but not to everyones benefit, said John-David Lovelock, 
Distinguished VP Analyst at Gartner. 

Some software spending increases are attributable to GenAI, but to a software 
company, GenAI most closely resembles a tax. Revenue gains from the sale of 
GenAI add-ons or tokens flow back to their AI model provider partner. 

Elsewhere, spending on software is predicted to rise 12.6%, and device 
spending rising 5.4%. Investment on IT services is estimated to increase by 
7.1%, a significant decrease on the 9.7% in the previous forecast, but one 
Gartner says was to be expected. 

"The change fatigue in CIOs that we saw at the start of the year has now 
abated and the contract backlogs going back to the third quarter of 2023 are 
being cleared. We expect to see a larger rush towards the end of the year to 
make up for the slow start," said Lovelock. More from TechRadar Pro Your 
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productivity tools around today



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Link to news story:
https://www.techradar.com/pro/gartner-warns-it-spending-growth-may-not-be-as-s
trong-as-expected-and-ai-is-to-blame


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