Increased IT spending marred by industry price hikes

Worldwide IT spending is expected to surge in 2025, though research from Gartner suggests much of this growth will be absorbed by price increases.

Spending will total $5.61 trillion this year, marking a growth rate of 9.8% from $5.11 trillion in 2024. Last year, Gartner predicted global IT spending would hit $5 trillion.

But while budgets for CIOs are increasing, Gartner analyst John-David Lovelock said a large portion will offset price increases in recurrent spending.

“This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth,” Lovelock said.

“All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations,” he added.

The breakdown of where the increased spending will occur shows the highest growth in data center systems, which will see a growth rate of 23.2% from $329 billion to over 400 billion. This is, however, a growth rate lower than 2024’s 39.4%.

Spending on devices will also increase by 10.4% from around $734 billion to around $810 billion. This is a higher growth rate than in 2024, which was 6%.

Software spending increased from $1.09 trillion to $1.24 trillion, IT services from $1.58 trillion to $1.73 trillion, and communication services from $1.37 trillion to $1.42 trillion.

Lovelock highlighted generative AI in his explanation of the results, stating that the technology is approaching the ‘trough of disillusionment’ which reflects CIOs declining expectations for the technology, but not their spending.

“For instance, the new AI-ready PCs do not yet have ‘must have’ applications that utilize the hardware. While both consumers and enterprises will purchase AI-enabled PC, tablets, and mobile phones, those purchases will not be overly influenced by the generative AI functionality,” Lovelock said.

Spending on AI-optimized servers clearly outpaces spending on traditional servers, the research shows, reaching $202 billion.