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Tech ObserverNewsEnterprise ITNo direct impact of Russia-Ukraine war on global IT as spending likely to reach $4.4 trillion in 2022

No direct impact of Russia-Ukraine war on global IT as spending likely to reach $4.4 trillion in 2022

India's spending on IT services is forecast to total $19.7 billion in 2022, an 8.6% growth from 2021. Gartner says the increasing cost of talent will be one of the major growth drivers.

India's spending on IT services is forecast to total $19.7 billion in 2022, an 8.6% growth from 2021. Gartner says the increasing cost of talent will be one of the major growth drivers.

The Russia-Ukraine war is not expected to have a direct impact on global IT spending. Price and wage inflation compounded with talent shortages and other delivery uncertainties are expected to be greater impingements on CIOs’ plans in 2022 but will still not slow down technology investments, said research firm in its latest report.

Worldwide IT spending is expected to reach $4.4 trillion in 2022, up 4% from 2021, according to the research firm’s latest prediction. India’s IT spending is expected to reach $110.6 billion in 2022, up 6.3 per cent from $110.6 billion in 2021.

“This year is proving to be one of the nosiest years on record for CIOs,” said John-David Lovelock, distinguished research vice president at Gartner.

“Geopolitical disruption, inflation, currency fluctuations and supply chain challenges are among the many factors vying for their time and attention, yet contrary to what we saw at the start of 2020, CIOs are accelerating IT investments as they recognize the importance of flexibility and agility in responding to disruption,” Lovelock said.

“As a result, purchasing and investing preference will be focused in areas including analytics, cloud computing, seamless customer experiences and security.”

Gartner also said that inflation impacts on IT hardware — devices and PCs — from the past two years are finally dissipating and are starting to spill over into software and services. With the current dearth of IT talent prompting more competitive salaries, technology service providers are increasing their prices, which is helping to increase spending growth in these segments through 2022 and 2023.

Worldwide IT Spending Forecast (Millions of U.S. Dollars)

  2021 Spending 2021

Growth (%)

2022 Spending 2022

Growth (%)

2023 Spending 2023

Growth (%)

Data Center Systems  

207,306

 

6.7

 

218,634

 

5.5

 

230,385

 

5.4

Software 614,494 15.9 674,889 9.8 754,808 11.8
Devices 809,452 16.1 824,600 1.9 837,844 1.6
IT Services 1,185,103 10.6 1,265,127 6.8 1,372,892 8.5
Communications Services  

1,443,419

 

3.4

 

1,448,396

 

0.3

 

1,477,798

 

2.0

Overall IT 4,259,773 9.5 4,431,646 4.0 4,673,728 5.5

Source: Gartner (April 2022)

Software spending is expected to grow 9.8% to $674.9 billion in 2022 and IT services is forecast to grow 6.8% to reach $1.3 trillion.

Gartner also said that the rise of enterprise application software, infrastructure software and managed services in the near and long term demonstrates that the trend toward digital transformation is not a one- or two-year trend, rather it is systemic and long-term. For example, infrastructure as a service (IaaS) underpins every major consumer-focused online offering and mobile application, accounting for a significant portion of the almost 10% growth in software spending in 2022.

Gartner expects digital business initiatives such as experiential end-consumer experience and optimization of supply chain to push spending on enterprise applications and infrastructure software into double-digit growth in 2023.

“In India, the forecast has been revised from the earlier estimate of $105.2 billion, primarily due to the growth in devices in 2021. In 2022, along with devices Indian CIO’s and business leaders will continue to increase their spending towards analytics, artificial intelligence, machine learning, customer experience and cloud in 2022,” said Naveen Mishra, senior research director at Gartner.

“Indian CIOs are contemplating to restructure their existing IT vendor engagement programs with an eye on co-creation of solutions in close partnership with their providers and newer contracting models,” Mishra said.

Furthermore, India’s spending on IT services is forecast to total $19.7 billion in 2022, an 8.6% growth from 2021. According to the latest forecast, the increasing cost of talent will be one of the major growth drivers.

India IT Spending Forecast (Millions of U.S. Dollars)

  2021 Spending 2021

Growth (%)

2022 Spending 2022

Growth (%)

2023 Spending 2023

Growth (%)

Data Center Systems 24,109 4.8 24,560 1.9 25,318 3.1
Software 3,588 14.4 3,819 6.4 3,992 4.5
Devices 48,542 34.8 51,470 6.0 54,345 5.6
IT Services 18,201 11.3 19,773 8.6 21,779 10.1
Communications Services 9,619 22.3 11,009 14.5 12,714 15.5
Overall IT 104,059 20.5 110,631 6.3 118,148 6.8

 

“CIOs anticipate having the financial and organizational ability to invest in key technologies throughout this year and next,” said Lovelock. “Some IT spending was on hold in early 2022 due to the Omicron variant and subsequent waves but is expected to clear in the near-term.”

“CIOs who keep their eye focused on key market signals, such as the shift from analogue to digital business and buying IT to building it, as well as negotiate with their vendor partners to assume ongoing risks, will fare better in the long-term. At this point, only the most fragile companies will be forced to pivot to a cost cutting approach in 2022 and beyond.”

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