Change is inevitable in the world of technology. However, while it drives innovation and competitive advantages, it also can bring fatigue — and that fatigue took its toll on CIOs in 2023, according to Gartner.

The analyst firm reports that CIO change fatigue has had an impact on IT spending. In 2023, according to Gartner, overall IT spending growth rate was 3.3%, only a 0.3% increase from 2022. However, based on its most recent IT spending forecast, things are looking up for 2024. It forecasts that worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8% from 2023.

The shocker is that generative artificial intelligence (genAI), which grabbed headlines and made gains in 2023, will not make a significant impact on growth in IT spending, according to John-David Lovelock, distinguished VP analyst at Gartner.

“While genAI will change everything, it won’t impact IT spending significantly,” Lovelock said. He compares genAI to other big technology trends such as IoT and blockchain. He adds that in 2024 organizations will invest in planning for how to use genAI. “However IT spending will be driven by more traditional forces, such as profitability, labor and dragged down by a continued wave of change fatigue.”

Gartner forecasts that IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time, overtaking communications services. Spending on IT services — which in Gartner’s forecast includes consulting, application implementation and managed services, infrastructure implementation and managed services, infrastructure as a service (infrastructure-as-a-service (IaaS)) and hardware support — is expected to grow 8.7% in 2024, reaching $1.5 trillion due to enterprises spending on organizational efficiency and optimization projects, according to the research firm.

“Communications services plateaued over a decade ago ... so being surpassed by software and services was inevitable,” Lovelock said. Communications services include fixed data, fixed voice, mobile network devices and unified communications (UC).

“Enterprises continue to find more uses for technology — IT has moved out of the back office, through the front office and is now revenue producing, until there is a plateau for how and where technology can be used in an enterprise, there cannot be a plateau in enterprise IT spending,” Lovelock said.

While 2024 looks to be more promising than 2023, Gartner predicts that change fatigue will continue to hamper IT spending. That change fatigue, according to the research firm’s forecast, could translate into change resistance. That is, according to Gartner, CIOs may be reluctant to commit to new contracts, long-term initiatives and new technology partners. And when they to commit to, CIOs will look for higher levels of risk mitigation and greater certainty of outcomes.

[caption id="attachment_137648" align="alignnone" width="927"] Worldwide IT spending forecast (millions of U.S. dollars)[/caption]

In Gartner’s IT Spend Forecast 4Q23: What to Expect in 2024 and Beyond webinar, Lovelock broke down the role of AI in IT spending in the future. In looking at data center spending, and AI servers specifically, he said, “We go from nothing in 2021 to 39.7 percent overall spend on AI servers in 2027. It’s about the price of these servers as much as anything. The number of units is relatively low. AI servers are tremendously expensive compared to lower-cost servers out there, particularly the ones being used in hyperscale data centers.”

In terms of AI spending overall, Lovelock and Gartner forecast it to reach $3 trillion dollars between 2023 and 2027. “That’s the amount of cash that’s going to be turned over by enterprises for AI — massive amounts of money change in the way the way software and services are delivered. AI is not a market that you try to get into. It’s a market you cannot avoid. Because every piece of technology is a channel for AI.”