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Global IT spending set to hit $4.7 trillion in 2023, driven by automation

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Global IT spending is projected to grow by 4.3% this year to reach $4.7 trillion, with CIOs continuing to lose the competition for IT talent, leading to a shift in spending towards technologies that enable automation and efficiency to drive growth with fewer employees.

“Digital business transformations are beginning to morph,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “IT projects are shifting from a focus on external facing deliverables such as revenue and customer experience, to more inward facing efforts focused on optimization.”

The software segment will see double-digit growth in 2023 as organizations increase utilization and reallocate spending to core applications and platforms that support efficiency gains, such as enterprise resource planning (ERP) and customer relationship management (CRM) applications. Vendor price increases will also continue to bolster software spending through this year.

While the overall outlook for enterprise IT spending is positive, devices spending will decline 8.6% in 2023 due to the ongoing impact of inflation on consumer purchasing power (see Table 1).

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

  2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%) 2024 Spending 2024 Growth (%)
Data Center Systems 221,223 16.6 217,880 -1.5 235,530 8.1
Devices 766,279 -6.3 700,023 -8.6 748,150 6.9
Software 803,335 10.3 911,663 13.5 1,039,175 14.0
IT Services 1,305,699 7.5 1,420,905 8.8 1,585,373 11.6
Communications Services 1,423,075 -1.9 1,461,662 2.7 1,517,877 3.8
Overall IT 4,519,610 2.7 4,712,133 4.3 5,126,105 8.8

Source: Gartner (July 2023)

“The devices segment is experiencing one of its worst growth years on record,” said Lovelock. “Even as inflation eases slightly in some regions, macroeconomic factors are still negatively impacting discretionary spending and lengthening device refresh cycles. Devices spending is not expected to recover to 2021 levels until at least 2026.”

While generative artificial intelligence (AI) is top of mind for many business and IT leaders, it is not yet significantly impacting IT spending levels. In the longer-term, generative AI will primarily be incorporated into enterprises through existing spending.

“Generative AI’s best channel to market is through the software, hardware and services that organizations are already using,” said Lovelock. “Every year, new features are added to tech products and services as add-ons or upgrades. Most enterprises will incorporate generative AI in a slow and controlled manner through upgrades to tools that are already built into IT budgets.”

“When it comes to AI this year, organizations can thrive without having AI in production but they cannot be without a story and a strategy,” added Lovelock.

Navigating recessionary budget pressures on IT departments

 960 640 Stuart O'Brien
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In today’s challenging economic landscape, budgetary pressures have become a reality across every department. None more so than IT. In spite of the promise of increased productivity and performance, advanced technologies such as AI, faster storage, and more secure data inevitably cost more and take longer to deliver than today’s budgets can afford.

IT directors are grappling with the need to accomplish their initiatives, while operating within shrinking financial constraints. The good news is that some of the largest and blue-chip businesses are already using a viable solution, and despite recessionary budget pressures, many companies still have the resources to invest for productivity and growth. Steve Hollingsworth, Director, Covenco, explores further…

Economy induced budget cuts

During an economic downturn, organisations face various challenges regarding funding and executing their IT projects. Budgets are often reduced, and IT departments find themselves forced to accomplish more with fewer resources. In addition, the increasing cost of borrowing has significant implications for organisations’ ability to invest in IT equipment, which can hinder productivity and growth.

As the cost of borrowing rises, organisations face higher interest rates on loans, making it more expensive to finance capital expenditures, including investments in IT equipment. This limits their ability to allocate funds towards technological advancements that drive innovation and growth. Additionally, higher borrowing costs often lead organisations to defer or scale back their technology upgrade plans. This results in maintaining outdated IT infrastructure, impeding productivity, efficiency, and competitiveness in an increasingly digital marketplace.

Tackling inflation head on

Organisations must make informed decisions about prioritising technology initiatives by recognising the potential impact of borrowing costs on IT investments. Collaborating with specialist IT brokers who offer cost-effective alternatives for acquiring IT equipment becomes crucial in navigating budget constraints while still investing in the technology necessary for growth and innovation.

It’s no secret that a good broker can deliver remarkable cost savings when replacing defective equipment – or expanding an existing system. And now, many larger organisations are also discovering that implementing previous-generation IT equipment can benefit them in other ways, including:

– Matched system opportunities

Supplementing existing infrastructure with matching servers, storage, and networking equipment is far easier, cheaper and more efficient. There is no need to rip and replace a functional environment, with all the associated upheaval of introducing new software versions, licences, and training.

– Opportunity for competitive advantage

When competitors face investment challenges due to increased borrowing costs, organisations that can navigate these constraints can gain a competitive advantage. Businesses can streamline operations, enhance customer experiences, and differentiate themselves in the market by strategically investing in IT equipment and leveraging advanced technologies.

– A catalyst for innovation and growth: 

By embracing digital transformation initiatives and adopting cutting-edge IT solutions, organisations can optimise processes, automate workflows, and unlock new opportunities. This positions them to respond more effectively to market dynamics, improve decision-making, and adapt swiftly to changing customer demands.

– Long-term cost savings: 

Although the initial investment in IT equipment may seem challenging due to borrowing costs, it is important to consider the long-term cost savings associated with enhanced efficiency and productivity. Modern IT infrastructure can streamline workflows, reduce downtime, and improve overall operational effectiveness, leading to significant cost savings over time.

– Improved sustainability:

IT Brokerage companies are vital in helping today’s leading organisations achieve their sustainability goals. By partnering with an accredited broker, businesses can effectively manage their IT assets throughout their lifecycle, contributing to a more sustainable and environmentally conscious approach. Specialist brokers will also offer aspects of an IT Asset Disposition (ITAD) solution to ensure that all data-carrying assets are wholly sanitised for data security.

Those who overcome these obstacles can gain a competitive advantage by leveraging technology to drive innovation, enhance productivity, and differentiate themselves in the marketplace. Strategic investment in IT, even in the face of higher borrowing costs, can lead to long-term growth, cost savings, and improved operational efficiency.

IT projects no longer have to be restricted by recessionary budget pressures. By embracing the cost-effective solutions specialist IT brokerage companies provide, IT directors can achieve their objectives while maximising limited resources. And so by employing refurbished hardware from major manufacturers, many organisations are already maintaining performance, reducing costs, and contributing to sustainable practices while improving their productivity and delivering growth.

Image by Kevin Morison from Pixabay

Government CIO spending on IT predicted to grow 8% in 2023

 960 640 Stuart O'Brien
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Worldwide government IT spending is forecast to total $589.8 billion in 2023, an increase of 7.6% from 2022, with inflation and skills shortages among the top considerations fort CIOs.

That’s according to research from Gartner, which says that this year they will also ensure their digital projects endure mission impact. An increasing number of government institutions are already putting in place at least one digital metric linked directly to outcomes associated with their organization’s public purpose or mission.

By 2026, Gartner foresees over 75% of governments will gauge digital transformation success by measuring the enduring mission impact.

“Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organizational accountability,” said Apeksha Kaushik, Principal Analyst at Gartner. “In addition, the “great resignation” and the competing demand from the commercial sector have forced governments to re-examine their approaches to counterbalance internal talent scarcity.

“Governments are increasingly spending their IT budgets to replace legacy applications. Gartner’s 2023 CIO and Technology Executive Survey showed that 57% of government CIOs plan to increase funding for application modernisation in 2023, up from 42% in 2022,”

Software to Remain Highest Spending Segment in 2023

In 2023, software will continue to be the highest growing segment in 2023 (see Table 1). Application modernization investments will increase supported by more software-as-a service-based solution offerings. The use of low-code application platforms (LCAPs) is also on the rise and will further accelerate legacy modernization efforts.

Table 1. Worldwide Government IT Spending Forecast (Millions of U.S. Dollars)

Segment 2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%)
Data Center Systems 25,760 11.1 26,623 3.3
Devices 34,224 -8.7 32,643 -4.6
Internal Services 66,940 -2.3 69,178 3.3
IT Services 191,958 3.4 209,103 8.9
Software 161,894 10.0 183,733 13.5
Telecom Services 67,583 -4.9 68,514 1.4
Total 548,359 2.9 589,794 7.6

Source: Gartner (May 2023)

Government spending on IT services will continue unabatedly in 2023. “Compensation constraints and limited resources to attract and retain IT talent is becoming an even bigger challenge today as many governments are facing IT talent shortage,” said Kaushik.

To continue modernizing and innovating critical IT infrastructure and applications, some government organizations will embrace a multisourced workforce strategy by optimizing the use of internal IT talent and investing in employee experience tools to empower and spark innovation, as well as partnering with external IT service providers to speed time to value.

Throughout 2023, government organizations will continue to invest in initiatives that improve access to digital services as constituents increasingly demand experiences that are equivalent to online customers.

While digital transformation remains a top priority for governments, some government CIOs have indicated they are falling short in realizing maximum benefits from their digital investments. “Government CIOs who are moving beyond scaling digital solutions across their critical services are ensuring that further investment in digital solutions can directly impact how they achieve the mission or public purpose of their organization,” said Kaushik.

Worldwide public cloud end-user spending to hit $600bn in 2023

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Worldwide end-user spending on public cloud services is forecast to grow 21.7% to total $597.3 billion in 2023, up from $491 billion in 2022, according to the latest forecast from Gartner.

Cloud computing is driving the next phase of digital business, as organizations pursue disruption through emerging technologies like generative artificial intelligence (AI), Web3 and the metaverse.

“Hyperscale cloud providers are driving the cloud agenda,” said Sid Nag, Vice President Analyst at Gartner. “Organizations today view cloud as a highly strategic platform for digital transformation, which is requiring cloud providers to offer more sophisticated capabilities as the competition for digital services heats up.”

“For example, generative AI is supported by large language models (LLMs), which require powerful and highly scalable computing capabilities to process data in real-time,” added Nag. “Cloud offers the perfect solution and platform. It is no coincidence that the key players in the generative AI race are cloud hyperscalers.”

All segments of the cloud market are expected see growth in 2023. Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 30.9%, followed by platform-as-a-service (PaaS) at 24.1% (see Table 1).

Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

  2022 2023 2024
Cloud Application Infrastructure Services (PaaS) 111,976 138,962 170,355
Cloud Application Services (SaaS) 167,342 197,288 232,296
Cloud Business Process Services (BPaaS) 59,861 65,240 71,063
Cloud Desktop-as-a-Service (DaaS) 2,525 3,122 3,535
Cloud Management and Security Services 34,487 42,401 51,871
Cloud System Infrastructure Services (IaaS) 114,786 150,310 195,446
Total Market 490,977 597,325 724,566

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service
Note: Totals may not add up due to rounding.
Source: Gartner (April 2023)

Gartner predicts that by 2026, 75% of organizations will adopt a digital transformation model predicated on cloud as the fundamental underlying platform.

“The next phase of IaaS growth will be driven by customer experience, digital and business outcomes and the virtual-first world,” said Nag. “Emerging technologies that help businesses interact more closely and in real time with their customers, such as chatbots and digital twins, are reliant upon cloud infrastructure and platform services to meet growing demands for compute and storage power.”

While cloud infrastructure and platform services are driving the highest spending growth, SaaS remains the largest segment of the cloud market by end-user spending. SaaS spending is projected to grow 17.9% to total $197 billion in 2023.

“The technology substrate of cloud computing is firmly dominated by the hyperscalers, but leadership of the business application layer is more fragmented,” said Nag. “Providers are facing demands to redesign SaaS offerings for increased productivity, leveraging cloud-native capabilities, embedded AI and composability – particularly as budgets are increasingly driven and owned by business technologists. This change will ignite a wave of innovation and replacement in the cloud platform and application markets.”

IT spending to hit $4.6 trillion in 2023

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Worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.5% from 2022 – despite continued global economic turbulence, all regions worldwide are projected to have positive IT spending growth.

“Macroeconomic headwinds are not slowing digital transformation,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023. Prioritisation will be critical as CIOs look to optimise spend while using digital technology to transform the company’s value proposition, revenue and client interactions.”

The software segment will see double-digit growth this year as enterprises prioritize spending to capture competitive advantages through increased productivity, automation and other software-driven transformation initiatives. Conversely, the devices segment will decline nearly 5% in 2023, as consumers defer device purchases due to declining purchasing power and a lack of incentive to buy (see Table 1).

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

  2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%) 2024 Spending 2024 Growth (%)
Data Center Systems 216,095 13.7 224,123 3.7 237,790 6.1
Devices 717,048 -10.7 684,342 -4.6 759,331 11.0
Software 793,839 8.8 891,386 12.3 1,007,769 13.1
IT Services 1,250,224 3.5 1,364,106 9.1 1,502,759 10.2
Communications Services 1,424,603 -1.8 1,479,671 3.9 1,536,156 3.8
Overall IT 4,401,809 0.5 4,643,628 5.5 5,043,805 8.6

Source: Gartner (April 2023)

As enterprises navigate continued economic turbulence, the split of technologies being maintained versus those driving the business is apparent in their position relative to overall average IT spending growth.

“CIOs face a balancing act that is evident in the dichotomies in IT spending,” said Lovelock. “For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services.”

The IT services segment will continue its growth trajectory through 2024, largely driven by the infrastructure-as-a-service market, which is projected to reach over 30% growth this year. For the first time, price is a key driver of increased spend for cloud services segments, rather than just increased usage.

Exposure from Bank Failures Remains Contained, but Tech CEOs Must Prepare for Disruption

The collapse of Silicon Valley Bank, Signature Bank and Credit Suisse created a shockwave within the banking and tech industries. While exposure remains relatively contained, tech startups are likely to face renewed questions and scrutiny from stakeholders, clients and prospects.

“This is not just a tech problem, as these firms lent money to all forms of startups – not just IT,” said Lovelock. “Tech CEOs must urgently ensure they are moving their organization forward by conserving working capital, monitoring the impact on cash, securing access to credit and keeping a close eye on talent and culture. Once the organization is properly prepared, tech CEOs can then direct and engage employees to find, accelerate and execute on market opportunities.”

Tech Talent Shortages Continue Amidst Layoffs

Even as layoffs continue to impact the tech industry at large, there is still a critical shortage of skilled IT labor. The demand for tech talent greatly outstrips the supply, which will continue until at least 2026 based on forecast IT spend.

“Tech layoffs do not mean that the IT talent shortage is over,” said Lovelock. “IT spending on internal services is slowing in all industries, and enterprises are not keep up with wage rate increases. As a result, enterprises will spend more money to retain fewer staff and will turn to IT services firms to fill in the gaps.”

The risk of IT business as usual 

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IT teams within mid-sized organisations are over-stretched. Resources are scarce, with sometimes skeleton teams responsible for all aspects of IT delivery across large numbers of users. With up to 90% of the team’s time being spent ‘keeping the lights on’, there is minimal scope for the strategic thinking and infrastructure optimisation that business leaders increasingly demand. Yet without IT, businesses cannot function. And in many cases, there will be compliance or regulatory consequences in the event of a data breach.

With cyber security threats rising daily, businesses cannot afford to focus only on Business as Usual (BAU). But without the in-house expertise in security, backup and recovery, or the time to keep existing skills and knowledge at the cutting edge, IT teams are in a high-risk catch-22.

Steve Hollingsworth, Director, Covenco and Gurdip Sohal, Sales Director, Covenco explain why a trusted IT partner with dedicated expertise in key areas such as infrastructure, backup and security to the existing IT team, is now a vital component of supporting and safeguarding business…

Unattainable Objectives

Prioritising IT activity and investment is incredibly challenging. While IT teams are being pulled from pillar to post simply to maintain essential services, there is an urgent need to make critical upgrades to both infrastructure and strategy. The challenges are those IT teams will recognise well: cyber security threats continue to increase, creating new risks that cannot be ignored. Business goals – and the reliance on IT – are evolving, demanding more resilience, higher availability and a robust data recovery strategy. Plus, of course, any changes must be achieved with sustainability in mind: a recent Gartner survey revealed that 87% of business leaders expect to increase their investment in sustainability over the next two years to support organisation-wide Environmental, Social and Governance (ESG) goals.

But how can IT Operations meet these essential goals while also responding to network glitches, managing databases and, of course, dealing with the additional demands created by Working from Home (WFH)? Especially when skills and resources are so thin on the ground. While there are some indications that the continued shortage of IT staff may abate by the end of 2023, that doesn’t help any business today.

Right now, there is simply no time to upskill or reskill existing staff. Indeed, many companies are struggling to keep hold of valuable individuals who are being tempted elsewhere by ever rising salaries. Yet the business risk created by understaffed and overstretched IT teams is very significant: in the most recent fine imposed by the Information Commissioner’s Office (ICO), for example, companies are being warned of complacency and failing to take the essential steps of upgrading software and training staff.

Differing Demands

With four out of five CEOs increasing digital technology investments to counter current economic pressures, including inflation, scarce talent, and supply constraints, according to Gartner, something has to give if resources remain so stretched. And most IT people will point immediately to the risk of cyber security breach. Few companies now expect to avoid a data breach. According to the 2022 IBM Data Breach survey, for 83% of companies, it’s not if a data breach will happen, but when. And they expect a breach to occur more than once.

The research confirms that faster is always better when detecting, responding to and recovering from threats. The quicker the resolution, the lower the business cost.  But how many IT teams have the resources on tap to feel confident in the latest securitypostures or create relevant data backup and recovery strategies?

These issues place different demands on IT teams. While most organisations will need 24/7 monitoring against the threat of a cyber-attack, in contrast establishing and then maintaining data backup and recovery policies are not skills that are required full time. Most companies need only an annual or bi-annual review and upgrade. Which is where a trusted partner with the ability to deliver an end-to-end service covering infrastructure, backup, managed services and security – that can flex up and down as the business needs it – is now becoming a core resource within the IT Operations team.

Extended Expertise Resource

A partner with dedicated technical expertise can augment existing skills in such specialist areas. These are individuals who spend every day assessing the latest technologies and solutions, who understand business needs and know how to achieve a best practice deployment quickly and, crucially, right first time.

Taking the time to understand the entire IT environment and assessing the backup and recovery needs, for example, is something that an expert can confidently and quickly achieve without the Business-as-Usual distractions a member of the IT team faces. What is the company’s Recovery Point Objective (RPO) or Recovery Time Objective (RTO)? How long will it take to get back up and running in the event of an attack or server failure? What are the priority systems? How is the business going to deal with a cyber-attack?

By focusing exclusively on where risks may lie and then implementing the right solutions quickly and effectively, a partner can de-risk the operation. From a VEEAM backup vault in the cloud or instant database copies using IBM FlashSystem, a disaster recovery plan that includes relocation or high availability with a goal of achieving a local recovery within minutes, the entire process can be achieved while allowing the IT team to concentrate on their existing, demanding, roles.

Conclusion

Whether a company needs to expand its infrastructure to support the CEO’s digital agenda or radically improve cyber security, or both, very few IT teams have either the spare capacity or dedicated expertise to deliver. Focusing on Business as Usual is, of course, an imperative – but unfortunately just not enough in a constantly changing technology landscape.

Partnering with a trusted provider with the capability to deliver a flexible end-to-end service with dedicated skills as and when required to supplement and support the overstretched IT team, is, therefore key to not only keeping the lights on, but also ensuring the business’ current and future needs are effectively addressed.

Access Control

Security Information & Event Management (SIEM) spend to exceed $6.4bn by 2027

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A new study from Juniper Research has found that the total business spend on SIEM (Security Identity & Event Management) will exceed $6.4 billion globally by 2027, from just over $4.4 billion in 2022.

It predicts that this growth of 45% will be driven by the transition from term licence (where businesses can use SIEM for specific licence lengths) to more flexible SaaS (Software-as-a-Service) models (where SIEM solutions are purchased via monthly subscription). This will enable small businesses to access previously unaffordable services.

A SIEM system is a combination of SIM (Security Information Management) & SEM (Security Event Management), which results in real-time automated analysis of security alerts generated by applications and network hardware; leading to improved corporate cybersecurity.

IBM Tops Juniper Research Competitor Leaderboard

The research identified the world’s leading SIEM providers by evaluating their offerings, and the key factors that have led to their respective success, such as the breadth and depth of their platforms.

The top 3 vendors are:
1.    IBM
2.    Rapid7
3.    Splunk

Research co-author Nick Maynard said: “Juniper Research has ranked IBM as leading in the global SIEM market, based on its highly successful analytics platform and its ease of integration. SIEM vendors aiming to compete must design scalable solutions that are accessible to smaller businesses, which can provide easy-to-understand, actionable insights for less experienced cybersecurity teams.”

Transition to SaaS Accelerating Rapidly

Additionally, the research found that SaaS business models within SIEM are gaining traction; accounting for almost 73% of global business spend on SIEM in 2027, from only 37% in 2022. This significant increase represents an opportunity for newer vendors to break into the market with appealing SaaS-based models, but SIEM vendors must be careful not to leave larger enterprises, which still prefer term licences, behind.

To find out more, see the new report: Security Information & Event Management: Key Trends, Competitor Leaderboard & Market Forecasts 2022-2027.

Global IT spending to grow 3% in 2022, says Gartner

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Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 3% from 2021, according to the latest forecast by Gartner.

While IT spending is expected to grow in 2022, it will be at a much slower pace than 2021 due to spending cutbacks on PCs, tablets and printers by consumers, causing spending on devices to shrink 5%.

“Inflation is top of mind for everyone. Central banks around the world are focusing on fighting inflation, with overall inflation rates expected to be reduced through the end of 2023. However, the current levels of volatility being seen in both inflation and currency exchange rates is not expected to deter CIOs’ investment plans for 2022,” said John-David Lovelock, distinguished research vice president at Gartner. “Organizations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term.”

Price increases and delivery uncertainty, exacerbated by the Russian invasion of Ukraine, have accelerated the transition in purchasing preference among CIOs, and enterprises in general, from ownership to service — pushing cloud spending to 18.4% growth in 2021 and expected growth of 22.1% in 2022. Not only is cloud service demand reshaping the IT services industry, but it is also driving spending on servers to 16.6% growth in 2022, as hyperscalers build out their data centers.

Spending on data center systems is forecast to experience the strongest growth of all segments in 2022 at 11.1%. Cloud consulting and implementation and cloud managed services are expected to grow 17.2% in 2022, from $217 billion in 2021 to $255 billion in 2022, helping to drive the overall IT services segment to 6.2% growth in 2022 (see Table 1).

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

  2021 Spending 2021  Growth (%) 2022 Spending 2022  Growth (%) 2023 Spending 2023  Growth (%)
Data Center Systems  

191,001

  

6.4

  

212,218

  

11.1

  

221,590

  

4.4
Software 735,869 14.7 806,800 9.6 902,182 11.8
Devices 808,580 16.0 767,872 -5.0 790,888 3.0
IT Services 1,207,966 12.8 1,283,192 6.2 1,389,169 8.3
Communications Services  

1,458,527

  

3.8

  

1,464,551

  

0.4

  

1,505,733

  

2.8
Overall IT 4,401,944 10.2 4,534,632 3.0 4,809,561 6.1

Source: Gartner (July 2022)

IT Talent Crunch is Affecting IT Spending

The critical IT skills shortage being felt across the globe is expected to abate by the end of 2023 when the corporate drive to complete digital transformations slows down and there has been time for upskilling and reskilling of existing staff. However, in the near term, CIOs will be forced to take action to balance increased IT demand and dwindling IT staffing levels.

The IT labor market continues to tighten, making it difficult to attract and retain talent. The Gartner Global Labor Market Survey of nearly 18,000 employees in the first quarter of 2022 showed compensation is the No. 1 driver for IT talent attraction and retention. Technology service providers are increasing prices on IT to allow for competitive salaries. This is driving an increase in spending in software and services through 2022 and 2023. Worldwide software spending is expected to grow 9.6% to $806.8 billion in 2022 and global spending on IT services is forecast to reach $1.3 trillion.

“Additionally, CIOs are using more IT services to assist in the lack of skilled IT staff. Tasks that require lower skill sets tend to be outsourced to managed service firms to alleviate staff time, while critical strategy work, which requires high-end skills unobtainable by many enterprises, will increasingly be fulfilled by external consultants,” said Lovelock.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 2Q22 Update.”

OPINION: Local authorities shouldn’t be daunted when moving to the cloud

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Local Authorities are under intense pressure to escalate Digital Transformation strategies while also dramatically reducing IT costs, achieving public sector sustainability goals and extending citizen self-service access to key services. With stretched in-house resources and a widely acknowledged skills shortage, the existing IT team is dedicated to keeping the lights on for as long as possible.

With many councils asking where they can find the time, resources or confidence to advance a cloud-first strategy, Don Valentine, Commercial Director, Absoft outlines five reasons for why embracing ERP in the cloud right now will actually solve many of the crisis facing public sector IT…

Unprecedented Challenge

Local Authority IT teams are facing incompatible goals. Is it possible to cut the IT budget by £millions per year over the next five years while also replacing an incredibly extensive legacy infrastructure with an up to the minute cloud based alternative? Or improve operational processes and ramp up citizen self-service while also ensuring stretched staff across departments have constant, uninterrupted access to the information and systems they need to be effective and productive?

With so many stakeholders to satisfy, the future looks daunting. But there are many reasons why Local Authorities should be confident to embrace a cloud-first strategy and the latest ERP solutions.

To read for article, hop on over to our sister site FM Briefing here.

ICT investment up as R&D drops during pandemic

 960 640 Stuart O'Brien
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45% of UK firms have decreased their research and development initiatives during the covid-19 pandemic, with even 18% of firms halting theirs altogether, according to new research from Durham University Business School.

However, 40% of firms have invested in their ICT, likely to be the result of firms having to facilitate working from home and remote engagement with customers, say the researchers.

Conducted by Richard Harris and John Moffat, Professors of Economics at Durham University Business School, the study seeks to understand the impact of the pandemic on UK firms’ research and development plans and whether or not companies had refocused their efforts in terms of investments.

The researchers interviewed over 4500 UK companies during the period between October and November 2020. Questions were centred around the firm size, industry, history of operations, before taking a more specific look at the companies’ previous research and development investment initiatives.

The results of the study suggest that the COVID-19 pandemic will have long-lasting negative effects on productivity and growth for firms, whilst increased ICT investment reflects the necessity for firms to become more digital.

Professor Richard Harris said: “The COVID-19 pandemic has had profound effects on the world economy, and in the UK specifically Bank of England figures suggest that it has led to the largest fall in GDP since 1709. While the short-run effects of the early stages of the pandemic are now well understood, less is known about its implications for growth in the medium to long-term.

“Our research findings clearly show that research and development spending dropped drastically during the covid-19 pandemic, which likely will have a negative impact on productivity and growth in the medium to longer term.”

The research reveals that the fall in intangibles investment is distributed unevenly across firms, with industry playing a major role in predicting the change in investment and internationally-oriented firms experiencing smaller declines in the early stages of the pandemic.

These research findings showcase the huge impact that covid-19 pandemic has had not only in the short-term, but in the long-term too for UK firms, with it likely that firms will have challenges related to productivity and growth in years to come due to the lack of R&D over the last year and a half.