IDC Predicts Slower Growth for Worldwide IT Spending in 2023

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Worldwide IT Spending in 2023

International Data Corporation (IDC) has revised its forecast for worldwide IT spending for the fifth consecutive month, citing the impact of a weakening global economy. The latest monthly forecast estimates that constant currency growth in IT spending will reach 4.4% to $3.25 trillion in 2023, a slight drop from the 4.5% in the previous month’s forecast, and a significant reduction from the 6.0% growth forecast in October 2022. Despite this, the IT industry is still performing well when compared to other types of business spending.

Stephen Minton, vice president in IDC’s Data & Analytics research group, comments, “Since the fourth quarter of last year, we have seen clear and measurable signs of a moderate pullback in some areas of IT spending. Tech spending remains resilient compared to historical economic downturns and other types of business spending, but rising interest rates are now impacting capital spending.”

IDC predicted that people will spend less on technology this year, especially consumers. Consumer IT spending is expected to decrease by 2%, which is a substantial difference from the 18% growth seen last year. This is the second year in a row where people spend less on technology. However, businesses still want to use more cloud and digital technology even though the economy is not great.

The report also found that companies that sell on-site technology, like computers and servers, are having a hard time this year. But companies that sell cloud technology, software, and services are still growing, though not as fast as before. These types of technology are now a bigger part of the overall technology spending, which shows that the technology industry is strong.

Some types of technology products, such as servers, wearable devices, and computer accessories, will not sell as much as IDC expected before. This is in addition to their earlier prediction that people will buy fewer computers. Businesses are also not spending as much on technology that they keep at their own offices, but they are still interested in cloud technology and services from other companies.

However, even cloud technology spending is not as high as it was last year. The technology industry is adapting to slower growth after the COVID-19 pandemic. But companies that provide cloud technology and big-scale technology are still planning to invest in the future, and these predictions have not changed much since last month.

According to IDC’s report, direct IT spending is expected to grow by 6.4% overall in 2023, while indirect spending through channel providers will increase by just 2.5% as credit tightening affects smaller businesses and consumers in their ability to fund technology investments.

Despite the downward trend in IT spending, IDC’s report also highlights some areas of strength and opportunity within the industry. For example, IDC predicts continued growth in cloud infrastructure and software, as well as increased investment in security, analytics, and artificial intelligence.

While there are headwinds that will affect IT spending in the years to come, there are also a lot of exciting opportunities for innovation and growth. The key for businesses will be to stay agile and responsive to changing market conditions.

Meanwhile, on Thursday, Gartner released a report forecasting that global IT spending will increase by 5.5% from 2022 to $4.6 trillion this year. Gartner expects IT spending growth across all regions worldwide.

Source: IDC

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