IT spending worldwide should grow by about 8 percent in 2024, following a smaller hike in 2023, and led by huge investments in AI, IaaS and cybersecurity in many regions, predicts analyst firm IDC.
IDC projects IT spending to grow by about 5 percent in 2023, with growth hampered by fears of a recession in the U.S., Western Europe, and other regions. While concerns over the possibility of a recession in the U.S. have not disappeared, they have receded, and economic growth in 2023 has been “resilient,” said Stephen Minton, vice president of data and analytics at IDC.
Strong Growth for Cybersecurity Software
Spending on cybersecurity, a subset of the broader software category, is expected to grow by about 18 percent next year, slightly higher than in 2023.
“Security [software] continues to offer some of the stronger overall growth opportunities,” Minton said in an Aug. 16 webinar, State of the Market: IT Spending by Industry Update, August 2023
Spending on IaaS is expected to grow by about 22 percent in 2024, down slightly from the growth of the previous two years, Minton added. IDC projects software spending to increase by about 10 percent in 2024, similar to the growth projected for 2023.
Within the broad software category, IDC expects spending on AI to increase by about 38 percent in 2024, nearly matching its growth in 2023. In recent months, there has been an “increased focus on the role of AI and the importance of AI as a long-term driver of IT spending,” Minton said.
Collaborative software also remains hot, with a spending increase of about 17 percent projected in 2024, similar to the number IDC projects for 2023.
IDC projects worldwide IT spending of about $3.3 trillion in 2023. A slowdown of the economy in China, a U.S. recession, and the continuing war in Ukraine could still negatively impact the worldwide economy in 2024, Minton said.
A slow recovery in PC sales, project delays from cost cutting, supply chain shortages, and trade restrictions also could potentially eat into the 2024 IT spending projections, IDC said.
Tight CISO Budgets
The IDC predictions seem more bullish on cybersecurity spending than a recent YL Ventures report, based on the venture capital firm’s surveys of CISOs. Just 12 percent of CISOs reported budget increases, but another third said their budgets are unchanged, and 21 percent said their budgets were frozen. Meanwhile, 33 percent reported budget cuts.
YL Ventures pointed out that 45 percent of CISOs reported either unchanged or growing budgets, despite low expectations for cybersecurity spending.
IDC, however, sees steady growth in IT spending and in the worldwide economy through 2024, despite fears of a recession in many regions. “We’ve had more stability this year than a lot of economists and forecasters were expecting,” Minton said. “Since the beginning of the year [there’s been] more resilience in the global economy.”