Spending on data centre systems expected to boom this year
Worldwide IT spending will total $5.26 trillion in 2024, an increase of 7.5% from 2023, according to new forecast by market research firm Gartner. Thanks to the focus on GenAI, spending on data centre systems is booming.
Spending on data centre systems is expected to increase 24% in 2024, up from the previous quarter’s forecast of 10% growth. This is due in large part to increased planning for GenAI. Last year, spending on data centre systems was up 4%.
“The compute power needs of GenAI are being felt across the data center, and spending in that segment reflects this ravenous demand,” says John-David Lovelock, VP at Gartner.
IT services spending in total is now projected to grow 7.1% in 2024, down slightly from 9.7% in the last forecast, due in part to slower spending across subsegments like consulting and business process services.
“The change fatigue in CIOs that we saw at the start of the year has now abated and the contract backlogs going back to the third quarter of 2023 are being cleared. We expect to see a larger rush towards the end of the year to make up for the slow start”, Lovelock says..
Consultancy McKinsey says in a general analysis of the tech markets that although many trends faced declines in investment and hiring in 2023, the long-term outlook remains positive.
This optimism is supported by the continued longer-term growth in job postings for 15 tech trends (up 8 percent from 2021 to 2023) and enterprises’ continued innovation and heightened interest in harnessing these technologies, particularly for future growth, the company says.
“While many technologies have maintained cautious investment profiles over the past year, gen AI saw a sevenfold increase in investments, driven by substantial advancements in text, image, and video generation.”
The report says that trends with robust investment and innovation, such as gen AI, not only maintained but also increased their job postings, reflecting a strong demand for new and advanced skills.
“Electrification and renewables was the other trend that saw positive job growth, partially due to public sector support for infrastructure spending.”
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