Worldwide IT spending is projected to reach $5.61 trillion in 2025, marking a 9.8% increase from 2024, according to Gartner, Inc.’s latest analysis.
John-David Lovelock, a distinguished VP analyst at Gartner, notes that while CIO budgets are rising, much of this increase will counterbalance rising costs in regular expenditures. This scenario suggests that real IT spending may remain stagnant, as price escalations consume much of the budget growth. CIOs are now faced with heightened prices across major IT categories, leading them to reassess their overall budget projections.
The emergence of generative AI (GenAI) will notably impact IT investment, especially in hardware for data center systems, devices, and software, with all seeing double-digit growth in 2025. However, the functionality of upgraded segments may not yet reflect significant advancements despite the new hardware.
The report forecasts significant increases in spending across various IT segments:
- Data Center Systems: From $329 billion in 2024 (39.4% growth) to $405 billion in 2025 (23.2% growth).
- Devices: From $734 billion in 2024 (6.0% growth) to $810 billion in 2025 (10.4% growth).
- Software: From $1.09 trillion in 2024 (12.0% growth) to $1.25 trillion in 2025 (14.2% growth).
- IT Services: From $1.59 trillion in 2024 (5.6% growth) to $1.73 trillion in 2025 (9.0% growth).
- Communications Services: From $1.37 trillion in 2024 (2.3% growth) to $1.42 trillion in 2025 (3.8% growth).
Overall, IT spending rises from $5.11 trillion in 2024 (7.7% growth) to $5.62 trillion in 2025 (9.8% growth).
Lovelock also highlighted the ambivalent outlook for GenAI. Despite expectations wavering, investments in GenAI technologies will persist. For example, new AI-ready PCs lack compelling applications that leverage their capabilities. Consequently, both consumers and enterprises will buy AI-enabled gadgets, but the purchases will not necessarily hinge on GenAI features.
Furthermore, expenditures on AI-optimized servers are set to double that of traditional servers in 2025, reaching $202 billion. Lovelock emphasizes that over 70% of this spending will come from IT services firms and hyperscalers. By 2028, hyperscalers will own AI-optimized servers valued at around $1 trillion, transitioning away from conventional business structures.
In India, spending on data center systems is forecasted to jump by 19.1% in 2025, almost doubling its growth rate from the previous year. The anticipated financial figures include:
- Data Center Systems: Projected to grow from $4.21 billion in 2024 (10.3%) to $5.01 billion in 2025 (19.1%).
- Devices: Expected to rise from $55.49 billion (12.2%) to $62.51 billion (12.7%).
- Software: From $17.89 billion (15.6%) to $20.91 billion (16.9%).
- IT Services: From $30.12 billion (9.0%) to $33.49 billion (11.2%).
- Communications Services: From $37.67 billion (4.7%) to $39.59 billion (5.1%).
Overall, India’s IT spending is anticipated to grow from $145.39 billion (9.8%) to $161.51 billion (11.1%).
Naveen Mishra, another Gartner VP analyst, states that businesses are channeling investments into AI-ready infrastructures for specific use cases, particularly accelerated servers for AI tasks. Software and IT services are primary drivers of this growth in India, with expected increases of 16.9% and 11.2% respectively.
Gartner anticipates that by 2026, more than half of software investments in application software will be influenced by GenAI, as companies enhance their technological frameworks for artificial intelligence solutions.
This forecast has been developed through meticulous analysis of sales from a wide array of IT product and service vendors, utilizing both primary and secondary research sources to compile a comprehensive database for market size estimation. The most recent findings are accessible through Gartner’s IT spending forecast reports, which provide critical insights into market dynamics and opportunities for IT stakeholders.
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