According to Gartner’s latest forecast, global IT spending will reach CA$4.5 trillion in 2022, up 3 per cent from 2021.

In 2022, spending on data center system is expected to grow by 11 per cent, software spending by 9.6 per cent. Spending on devices is expected to suffer a 5 per cent decline which is majorly attributed to the decline in demand for smartphones. IT services is expected to grow by 6.2 per cent and spending on communications services is expected to increase by 0.4 per cent.

Cloud spending is expected to grow by 22.1 per cent in 2022, building on growth of 18.4 per cent in 2021. With more organizations moving to the cloud, the global cloud market is expected to break the CA$1 trillion barrier in 2028, according to Facts and Factors.

Cloud consulting and implementation and cloud managed services are expected to grow by 17.2 per cent in 2022, from CA$217 billion in 2021 to CA$255 billion in 2022. Cloud spending is therefore expected to drive the overall IT services segment to 6.2 per cent growth in 2022.

A tight labor market and a shortage of skilled workers to fill the IT roles required will force technology service providers to raise prices to guarantee competitive salaries, driving up spending on software and services through 2022 and 2023. Worldwide software spending is projected to rise 9.6 per cent to CA$806.8 billion in 2022, and global IT services spending is projected to reach CA$1.3 trillion.

Although IT spending is expected to grow by 3 per cent in 2022, this is lower than the 10.2 per cent increase in 2021. The slowdown in growth is because of several factors, including inflation, which has forced many organizations to cut spending, the ongoing war in Russia, which has disrupted economic equilibrium, and COVID-19 lockdown recorded in China.

“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. 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,” said John-David Lovelock, research vice president at Gartner.

IT skill shortage is expected to decrease by the end of 2023, mainly due to companies’ diminishing drive to push digital transformation, but in the short term the problem is likely to continue due to increased IT needs and the decrease in the number of IT staff.

“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.

The sources for this piece include an article in Gartner.