The prospects for IT investment next year are promising: the growth rate is three times higher than GDP! 75% of CIOs want to spend more money on AI

Today, the global recovery is still slow. According to the recently released "World Economic Outlook Report" by the International Monetary Fund (IMF), global economic growth is expected to slow down from 3.5% in 2022. to 3.0% in 2023 and 2.9% in 2024. However, Gartner's IT spending data shows a sharp contrast: global IT spending is expected to grow by 8% in 2024. As the global economy slows down, IT spending bucks the trend and rises.

Recently, Gartner released the top ten strategic technology trends in 2024 and the forecast of global IT spending levels in 2024. The forecast is mainly based on the analysis of the sales of more than a thousand IT suppliers.

3/4 CIOs increase investment in AI, but spend little on generative AI

Gartner forecast: Global IT spending is expected to reach US$5.1 trillion in 2024, up from US$47,000 in 2023 billion, a year-on-year increase of 8%.

Global IT Spending Forecast

According to the chart, the overall growth in 2023 will be relatively slow, and there are many factors leading to this situation, such as consumer demand sharp declines, inflation and economic uncertainty, among others. The most obvious one is that consumer equipment purchases continue to slow down. According to Gartner forecasts, equipment spending this year is expected to drop by about 10%.

This decline in demand actually started in 2022. According to statistics, in the fourth quarter of 2022, global smartphone shipments fell by 18.3% year-on-year, the largest single-quarter decline on record. Full-year shipments were 1.21 billion units, a sharp decline of 11.3%, the highest since 2013. Minimum annual shipments. Global shipments of personal computers (PCs) fell nearly 29% year-on-year in the fourth quarter, marking the largest quarterly decline since the mid-1990s.

But in 2024, equipment spending will rebound, growing 4.8% to reach $722.47 billion.

The data center market has also experienced significant demand fluctuations in the past two years. In 2022, the market will grow by 19.7% year-on-year to reach $227 billion. According to forecasts, this growth rate will slow to 4.7% in 2023, then increase to 9.5% in 2024, and is expected to exceed US$260 billion next year.

Software spending has been relatively stable in the past two years and will grow by 13.8% in 2024, exceeding US$1 trillion. This is mainly driven by cloud services. Global public cloud service spending is expected to grow by 20.4% in 2024. Similar to 2023, the growth mainly comes from cloud provider price increases and increased utilization.

In addition, cybersecurity also drives software spending. In a Gartner survey, 80% of CIOs said they planned to increase cybersecurity spending in 2024. "AI brings new security threats to enterprises." said John-David Lovelock, vice president analyst at Gartner. "We expect double-digit growth in enterprise security spending in 2024."

The IT services and communication services sectors are the two largest markets covered by the forecast. The IT services market is expected to grow 10.4% next year to approximately US$1.547 trillion. The communications services market will grow by 3.3% to reach US$1.497 trillion.

Enterprises also continue to invest in AI and automation to improve operational efficiency and narrow the IT talent gap. Nearly three-quarters (73%) of CIOs surveyed by Gartner said their companies will increase investment in AI/ML in 2024.

However, specific to generative AI, although it has received widespread attention from the industry, it has not yet had a "substantial impact" on IT spending. "In 2023 and 2024, there will be very little IT spending related to generative AI." Lovelock express.

In fact, CIOs are experiencing change fatigue, manifested by their hesitancy to invest in new projects and initiatives, deferring some IT spending from 2023 to 2024, and this trend is expected to continue into 2025.

Lovelock said: "Facing a new wave of pragmatism, capital constraints or profit pressures, CIOs are deferring some IT spending. Enterprises are shifting the focus of IT projects to cost control, efficiency improvements and automation, while Cut back on IT initiatives that will take longer to bring about returns."

Top Ten Strategic Technology Trends for 2024

Every year, Gartner releases the top ten strategic technology trends that enterprise organizations need to explore. These trends will dominate the tech industry in the coming year.

AI Trust, Risk and Security Management (AI TRiSM)

The popularity of AI has led to a more urgent and clear need for AI trust, risk and security management. Gartner believes that without protective measures, AI models may quickly produce multiple negative effects or even get out of control, negating all the positive benefits brought by AI. Gartner predicts that by 2026, enterprises applying AI TRiSM controls will improve decision-making accuracy by eliminating 80% of erroneous and illegal information.

Continuous Threat Exposure Management (CTEM)

Continuous Threat Exposure Management is a pragmatic and systematic approach that allows enterprises to continuously and consistently assess the accessibility, Exposure and exploitability. Aligning CTEM assessment and remediation scope with threat vectors or business projects will uncover not only vulnerabilities but also threats that cannot be patched. Gartner predicts that by 2026, enterprises that prioritize security investments under CTEM initiatives will reduce vulnerabilities by two-thirds.

Sustainable Technology

Sustainable Technology is a framework of digital solutions that supports long-term ecological balance and human rights. The application of technologies such as artificial intelligence, cryptocurrency, the Internet of Things, and cloud computing has led to increasingly urgent concerns about energy consumption and the environment. It has become even more critical to ensure that the use of IT is more efficient, recyclable, and sustainable. Gartner predicts that by 2027, 25% of CIO compensation will be tied to their impact on sustainable technology.

Platform Engineering

Platform engineering refers to the discipline of building and operating self-service internal development platforms. Each platform is created and maintained by a dedicated product team and interfaces with tools and processes to support user needs. The goal of platform engineering is to optimize productivity and user experience and accelerate business delivery.

AI enhanced development

AI enhanced development refers to the use of AI technologies such as generative AI and machine learning to help software engineers design, code and test applications. Gartner said that these development tools infused with AI capabilities can reduce the time software engineers spend writing code and improve developers' productivity. They can spend more time doing more strategic things, allowing development teams to meet growing business needs.

Industry Cloud Platform

Gartner predicts that by 2027, more than 70% of enterprises will use industry cloud platforms to accelerate business plans, compared with less than 15% in 2023. Industry cloud platforms are provided by combining underlying SaaS, PaaS and IaaS services into an overall product. This often includes industry data weaving, libraries of packaged business capabilities, composition tools, and other platform innovation capabilities. Industry cloud platforms are customized cloud solutions for specific industries and can be further customized according to customer needs.

INTELLIGENT APPLICATIONS

Gartner defines "intelligence" in intelligent applications as the learned adaptive ability to make appropriate responses autonomously. This intelligence is used in many use cases to enhance and automate work. As a basic capability, intelligence in applications includes various AI-based services such as machine learning, vector storage, and connected data. These smart applications can provide an experience that continuously adapts to the user. The need for smart applications is now clear.

Nationalized generative AI

Gartner said that the integration of large-scale pre-trained models, cloud computing and open source is making generative AI democratized, enabling these models to be used by everyone. Used by workers around the world. Gartner predicts that by 2026, more than 80% of enterprises will use generative AI APIs and models or deploy generative AI applications in production environments, up from less than 5% in early 2023. Generative AI applications can provide enterprise users with access to a large number of internal and external information sources, which means a significant increase in the popularity of enterprise knowledge and skills.

Augmented Connected Workforce

The Augmented Connected Workforce (ACWF) is a strategy for optimizing employee value, and demand for talent is driving this trend. ACWF will use smart applications and workforce analytics to provide employees with an environment and guidance that enhances their experience, well-being and skills. Gartner predicts that by 2027, 25% of CIOs will use an enhanced connected workforce, reducing the time required to complete key positions by 50%.

Machine Customer

A machine customer is a machine customer that can negotiate and purchase goods and services independently. By 2028, there will be 15 billion connected products with the potential to serve as customers, and Gartner predicts that this growth will generate trillions of dollars in revenue by 2030.

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