Gartner’s 4 Biggest IT Sales Growth Markets For 2023

‘Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,’ says John-David Lovelock, distinguished vice president analyst at Gartner, in a statement.

Market research firm Gartner expects total worldwide IT spending in 2023 of $4.66 trillion, a 5.1-percent increase over the $4.43 trillion it estimated for 2022.

2023 IT demand is forecast to be strong as enterprises continue their digital business initiatives despite the current economic environment, said John-David Lovelock, distinguished vice president analyst at Gartner, in a statement.

“Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” Lovelock said. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others, but it is not projected to materially impact the overall level of enterprise technology spending.”

However, Lovelock said, inflation has cut consumer purchasing power worldwide.

“Consumer purchasing power has been reduced to the point that many consumers are now deferring 2022 device purchases until 2023, driving spending on devices down 8.4% in 2022 and 0.6% in 2023,” he said.

Gartner’s 2023 forecast for 2023 worldwide IT spending to rise 5.1 percent is actually lower than earlier predictions. Gartner in July forecast total 2023 worldwide IT spending would rise by 6.1 percent to $4.81 trillion compared to over its estimate of 2022 spending at $4.53 trillion.

Gartner’s worldwide IT spending forecast comes on the heels of a July 2022 survey Gartner did of over 200 chief financial officers which found that 69 percent of them expect to increase their spending on digital technologies, which the analyst firm said is in direct contrast to conventional wisdom that IT spending might fall in an economic downturn.

Spending is shifting from buying technology on its own towards technology, including cloud, for specific purposes, Lovelock said.

“As organizations look to also realize operations efficiency, cost reductions and/or cost avoidance during the current economic uncertainty, more traditional back-office and operational needs of departments outside IT are being added to the digital transformation project list,” he said.

Out of the five markets that Gartner highlights, only one is predicted to contract: devices. Click through our slideshow for more details on the IT sales trends for 2023, according to Gartner.

Devices Spending To Contract By 0.6 Percent

2023 Spending: $735.4 Billion

2022 Spending: $740.0 Billion

A predicted drop in worldwide spending on devices will be a drag on overall worldwide spending going into 2023, according to Gartner.

The analyst firm expects spending on devices to fall slightly by 0.6 percent in 2023 to $735.4 billion, down from estimated spending on devices of $740.0 billion, and down significantly from the $807.6 billion spent in 2021.

The drop in forecasted 2023 device sales is also a significant change from Gartner’s July estimate of 2023 device sales of 790.9 billion. At that time, Gartner was projecting 2023 sales to actually increase by 3.0 percent.

The drop in Gartner’s estimate is in sync with other reports related to PC shipments. IDC earlier this month estimated that third quarter 2022 PC shipments plummeted by 15 percent over third quarter 2021, while market research firm Canalys estimated worldwide combined shipments of desktop and notebook PCs fell 17.7 percent over the same period.

IDC said that PC shipments fell hard over 2022 primarily because sales rose very high in 2022 as people worked and studied from home during the COVID-19 pandemic. However, IDC said, third quarter shipments were still higher than pre-pandemic shipments.

That drop will lead to an expected 53-percent drop in sales in AMD’s client device segment, that company warned in October. Meanwhile, Intel is likely to unveil layoffs later this month due to an expected PC sales decrease.

Communications Services To Grow 2.4 Percent

2023 Spending: $1.43 Trillion

2022 Spending: $1.47 Trillion

While businesses spend more on communications services compared to other components of worldwide IT spending, growth going into 2023 is low, according to Gartner.

The analyst firm estimated 2023 spending on communications services will grow by 2.4 percent over 2022 to $1.47 trillion. But while growth is low, it is much better than Gartner’s estimated decrease in spending of 1.7 percent from 2021 to 2022.

Gartner in July estimated spending on communications services in 2023 would rise 2.8 percent to $1.51 trillion.

Data Center Systems To Grow By 3.4 Percent

2023 Spending: $216.3 Billion

2022 Spending: $209.2 Billion

Gartner forecasts 2023 worldwide spending on data center systems to rise by only 3.4 percent to $216.3 billion compared to its estimate of 2022 spending of $209.2 billion. It was a bit of a tough compare given that data center spending in 2022 rose a very strong 10.4 percent over that of 2021, Gartner said.

The 3.4-percent estimate of growth in 2023 over 2022 is down from Gartner’s July estimate of 4.4 percent.

Gartner said the spending on data center systems was sufficient to maintain existing on-premises data centers, but spending in this area is impacted as businesses shift more to spending on the cloud.

IT Services To Grow 7.9 Percent

2023 Spending: $1.36 Trillion

2022 Spending: $1.26 Trillion

Worldwide IT spending on IT services is slated to reach $1.36 trillion in 2023, representing a 7.9-percent growth over the $1.26 trillion spend on IT services in 2022, Gartner said. This makes IT services the second-largest area of IT spending after communications services.

Gartner’s estimate for 2023 IT services spending is slightly lower than its July estimate of $1.40 trillion.

Growth of spending on IT services hit 12.8 percent in 2021 over 2020, but fell significantly to only 4.2 percent in 2022, Gartner estimated.

Software To Grow 11.3 Percent

2023 Spending: $879.62 Billion

2022 Spending: $730.39 Billion

Gartner projects worldwide spending on software in 2023 to reach $879.63 billion, which would represent an 11.3-percent rise over the estimated $730.39 billion that will be spent on software in 2022.

The forecast in software spending is down from the $902.18 billion Gartner estimated in July.

Software has been a consistent growth engine for IT. Software spending in 2022 rose 8.0 percent over that of 2021, while in 2021 it rose 14.8 percent over that of 2020.

Gartner said the increased spending on software in large part reflects a shift in IT spending towards the cloud and away from data centers.