According to Gartner’s latest projections, global IT spending is projected to reach $5.74 trillion by 2025, which is an increase of 9.3% from 2024. This rise is primarily fueled by investments in generative AI (GenAI) infrastructure, leading to significant investments in data centers, servers, and associated systems.

As stated by John-David Lovelock, Distinguished VP Analyst at Gartner, investments in server infrastructure have notably outpaced previous growth rates seen in both cloud and outsourced services. The data center sector is set for lasting advancement driven by AI’s increasing computational needs, with server sales predicted to jump from $134 billion in 2023 to more than $257 billion by 2025.

Data center systems, which are forecasted to witness a strong growth of 35% in 2024, are expected to keep expanding, albeit at a slower rate. The computational requirements of GenAI are anticipated to fuel server acquisitions in data centers globally, with expenditure on servers projected to reach $332 billion by 2028. Mr. Lovelock pointed out that GenAI is likely to facilitate a quicker rise in server purchases compared to the cloud services boom in past decades.

Software Spending Projected to Grow

Software and IT services are key components of IT expenditure as well. Predictions indicate that software spending will increase from 11.7% in 2024 to 14% in 2025, totaling $1.23 billion, whereas IT services are also expected to grow by 9.4% in 2025, amounting to $1.73 billion.

A significant portion of this expenditure is expected to be directed towards GenAI applications and tools, as well as software for email and content creation. By 2025, GenAI products and services alone are projected to represent $7.4 billion in global IT spending, highlighting GenAI’s swift growth despite being a relatively new market with limited major players.

Gartner’s spending estimates are grounded in a comprehensive analysis of sales data from over 1,000 vendors, which provides an in-depth perspective on trends across hardware, software, IT services, and telecommunications. The latest report offers essential insights for businesses seeking to explore market growth opportunities and investment within the global IT sector. Lovelock also mentioned that, given the current growth path, IT spending could exceed $7 trillion by 2028.

Gartner’s quarterly IT spending forecasts, which include insights for Gartner clients through the ‘Gartner Market Databook, 3Q24 Update,’ serve as a vital resource for companies adapting to these shifting market conditions, as investments in data centers and IT services become more aligned with AI-driven workloads and sustainability imperatives.