As artificial intelligence (AI) becomes more mainstream in conversations across all channels, it's clear that AI will be a huge growth area this year and beyond.
But just how big this growth will be is up to Gartner, which predicts that customers will see healthier IT spending levels as a result of the move to adopt AI.
The analyst house currently expects global IT spending to hit $5.26 trillion this year, up 7.5% from 2023. GenAI's impact goes beyond those peddling software.
“GenAI's computing power needs are spanning the entire data center, and spending in the space is reflecting this strong demand,” said John David Lovelock, distinguished vice president analyst at Gartner.
“Part of the increase in software spending is due to GenAI, but GenAI is the closest thing a software company has to a tax. Revenues from GenAI add-ons and token sales are returned to our AI model provider partners.”
The industry is already seeing increased spending on AI and is already seeing some positive effects from increased customer interest.
“Given the rapid growth and storage demands of GenAI, it's not surprising to see data center spending increase significantly,” said Chris Harris, vice president of field engineering at Couchbase. “Recent data shows that 98% of organizations have specific goals to use the technology this year, but 59% are concerned they won't be able to manage their data and meet GenAI demands without significant investment. So the data center is a logical starting point.”
“But to realize the full potential of GenAI, organizations need a data management strategy combined with a modern infrastructure. To get the most out of their current and future AI investments, organizations need to be able to control data storage, access and usage, enable real-time data sharing, and maintain a unified database infrastructure to prevent multiple versions of data.”
Gartner also noted that while demand for IT services is down slightly from last year's levels, it continues to feature heavily in the market.
“The CIO change fatigue seen earlier this year is now easing and the backlog of contracts dating back to the third quarter of 2023 is being cleared. We expect to see even greater last-minute demand towards the end of the year to make up for the slow start,” Lovelock said.
Matt Pepper, digital transformation manager at WalkMe, said the idea that customers are ready to evolve their IT systems is a positive.
“It's good to see CIOs recovering from 'change fatigue' and pushing for new innovations, as is their appetite for more AI,” he said. “But organizations need to ensure that their investments deliver the expected benefits. For example, adding an AI copilot or image and text generation capabilities can provide big benefits, but only if employees feel that these tools actually improve their writing and remove complexity rather than adding it.”
He hinted at an opportunity for the channel to guide customers through AI adoption and ensure their experience meets their expectations.
“To ensure new capabilities are successful, organizations need to truly understand how they engage with the way their employees work and provide consistent, contextual experiences that enable users to take the right action with the right tool at the right time. If they take the right approach, the projected $1 trillion investment in software will deliver real benefits,” he added.
