IT spending to soar almost ten per cent this year

“GenAI is going to be sold, not bought,” says John Lovelock, VP analyst at Gartner

Worldwide IT spending is expected to rise 9.8 per cent this year, reaching a staggering $5.61tn (£4.6tn), according to analyst house Gartner.

Datacentre systems are to lead the charge with a 23.2 per cent increase.

Software and devices will both see double-digit growth (14.2 per cent and 10.4 per cent respectively), followed by IT services (nine per cent) and communications services (3.8 per cent).

These sectors were already in good health in the past, driving IT spending up 7.7 per cent year-on-year in 2024.

Investments in AI-optimised servers will also beat spending on traditional servers by far in 2025, reaching $202bn.

To understand where this growth comes from and if it will last, CRN sat down with John Lovelock, VP analyst at Gartner.

Lovelock explains the spending in datacentre systems “has been growing for a while,” driven by “a price increase” as well as “some new feature functionality” and an expanded range of buyers, with both “new companies buying it” and “a bigger number of people using it more intensely.”

Another key element of this growth is the need for companies to get software that matches their scale, as more and more are evolving in size and require “massive reinvestments in software” to answer their new needs.

Regional impact

But Europe isn’t really the one pushing that growth, as it only comes third in terms of importance to the IT spending market.

“The US is still the primary market, and APAC the second one.

“Until recently, the US dollar was actually softening, weakening, against currencies around the world.

“That has turned with the new administration coming in and the Federal Reserve System (Fed) no longer talking about rate cuts in 2025.

“That's actually completely changed the trajectory of the US dollar.”

Impact of AI and GenAI

This growth will also be influenced by the advent of AI and GenAI.

“There is a price increase in PCs, laptops, and mobile phones, to get them AI ready,” says Lovelock.

“CIOs are very concerned about such developments this year, and many of them are putting aside a substantial part of their budget just to handle price increases for the products and services that they already consume.

“GenAI is also part of this, but in many cases, it's almost hidden within that price increase.

“If you are buying something from Salesforce for example, their GenAI product ‘Einstein’ is included in the cost of your product, so you're spending a little bit more but you're also getting a little bit more.

“In 2025 we're going to see a lot more software companies embedding GenAI into their software.”

But even though generative AI is one of the reasons prices are rising, purchases are not yet “overly influenced by the GenAI functionality,” and the new technology will not impact spending “anywhere near the levels people are thinking,” according to Lovelock.

“There'll be free versions of agents and GenAI tools that consumers can use, the same way that there are free versions of Word processors, spreadsheets, PowerPoint presentations.

“There’s this basic level of software that's free, ad supported or membership supported, which would mean more users, but not more money.

“Right now, these PCs, tablets, laptops, are AI enabled, but there are no AI products out there that can take advantage of the hardware in a meaningful way.

“We are still waiting for the software that will exploit those PCs functionality, and there will be a monthly charge for the premium versions of it.

“Companies will be able to extract between $30 to $50 a month from consumers to use their model.”

But Lovelock adds this software is not expected to see the light of day anytime soon, as “the model providers themselves are not interested in providing a model that you can run on your own hardware.”

“We don't yet have the market mechanics set up to provide one of those in the next 18 months.”

He continues that “in 2025, GenAI is going to be sold, not bought.”

“PC, tablet, mobile phones will be sold to people with the GenAI feature in it.

“They're not going to market looking for these in the same way CIOs are going to start to get GenAI embedded in the software that they already own and operate.

“It's going to be sold to them, but they're not necessarily going to be looking for it.

“IT spending will take a bit of a dip in 2026 but will still grow well; and that's pretty much universal.

“In 2025, we're in the nine per cent range in most countries and regions, and then we’ll start coming off into eight next year.”