The IT market is one that is consistently growing and is showing no signs of slowing down. The latest predictions for Global IT spend are set to total $4.6 Trillion in 2023, up 5% from the previous year. Demand for digital business initiatives is set to grow as businesses work to become as efficient as possible. In the current economic climate, efficiency is more important than ever. Inflation is rising and global issues like the war in the Ukraine has made investing in efficient resources critical. Many companies have pushed their 2022 spending to 2023 due to these economic pressures hence why we’re seeing these forecasted rates. 

What areas of IT spending are predicted to grow the most? 

According to predictions, the software services sector is expected to experience the highest growth in the field of IT, with an estimated expenditure of £902,182 and a growth rate of 11.8%.  Specifically, Cloud and Enterprise applications. This is largely due to increased investment in these areas as companies look to drive digital transformation initially in response to the pandemic. Additionally, the day to day running and operations of a business are dependent on software, giving the software manufacturers the ability to raise prices without seeing an impact on demand. A final reason for the increase in prices is software companies protecting their services from challenges such as uncertain economic conditions. The recent trouble in Ukraine is an example of how such factors can influence the economic activities of businesses. Increasing your prices generates more revenue, acting as a safety blanket against unexpected circumstances. 

IT skills shortage is driving prices up

At present the market is experiencing an IT skills shortage. In response to this, employers are increasing salaries to try and attract and retain staff. In order to afford these salaries, technology service providers are increasing their prices. This has seen an increase in consumer spending through 2022 and 2023, as they are paying more for their products. However, predictions state that the skills shortage will start to decrease by the end of 2023. This is a result of the drive to digital transformation slowing down and businesses having time to upskill their current staff. However, for the first part of 2023, this staff shortage will continue to see spending increase due to pricing. 

An increased demand for Cloud Services

Demand for Cloud services is also driving the spending on IT.  Predictions state that spending will increase by 11.3% in 2023. As hybrid working continues to grow in popularity, the demand for Cloud services has increased for organisations. The benefits of Cloud services are also a key reason businesses are spending more on this valuable resource. The Cloud provides greater accessibility for businesses, meaning their services can be delivered on demand. This leads to better customer satisfaction which is key to a business’s success. 

Summary

2023 looks set to see an increase in global spending on IT, and there are multiple factors that have contributed to this. With inflation rising, companies are looking to improve efficiency and IT solutions are the keyway to achieve this. Cloud services are increasing in demand due to hybrid working, and the accessibility benefits it brings. These factors have led to a consensus in the market that spend will increase this year.

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