Forecast Highlights Server Sales Increasing Exponentially, Led by Spending in GenAI

ORLANDO, Fla.--(BUSINESS WIRE)--Oct. 23, 2024-- Worldwide IT spending is expected to total $5.74 trillion in 2025, an increase of 9.3% from 2024, according to the latest forecast by Gartner, Inc.

“Current spending on generative AI (GenAI) has been predominantly from technology companies building the supply-side infrastructure for GenAI,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “CIOs will begin to spend on GenAI, beyond proof-of-concept work, starting in 2025. More money will be spent, but the expectations that CIOs have for the capabilities of GenAI will drop. The reality of what can be accomplished with current GenAI models, and the state of CIO’s data will not meet today’s lofty expectations.”

Gartner analysts are discussing the trends that are impacting the IT market during Gartner IT Symposium/Xpo, taking place here through Thursday.

Server Sales Continue to Drive the Data Center Systems Segment

Data center systems spending grew by nearly 35% in 2024. While the segment will not see a jump equal to that in 2025, it is still set to grow by almost $50 billion in 2025 (See Table 1). This is led by server sales, which are set to almost triple from more than $134 billion in 2023 to $332 billion by 2028, including more than $257 billion in 2025.

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

"GenAI will easily eclipse the effects that cloud and outsourcing vendors had on previous years regarding data center systems," said Lovelock. “It took 20 years for the cloud and outsourcing vendors to build up spending to $67 billion a year on servers. The demand of GenAI will help nearly triple server sales from 2023 to 2028.”

Software and IT Services Drive Growth

Spending on software is expected to increase 14% to $1.23 billion in 2025, up from 11.7% growth in 2024. Meanwhile, IT services is expected to grow 9.4% to $1.73 billion in 2025, up from 5.6% in 2024.

“Software and IT services are a large driver of IT growth,” said Lovelock. “Spending on these segments is expected to be on AI-related projects, including email and authoring. This was a market that, despite its age and having been consolidated down to a small number of players, will add $6.6 billion to global spending in 2024 and $7.4 billion 2025 due in part to GenAI products and services.

“Our forecast projects that $500 billion will be added in spending every year in terms of growth rates. With this in mind, IT spending should cross the $7 trillion mark in 2028.”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q24 Update.”

Learn more in the complimentary Gartner webinar IT Spending Forecast, 3Q24 Update: 2025, The Trough is Coming.

About Gartner IT Symposium/Xpo

Gartner IT Symposium/Xpo is the world's most important gathering for CIOs and other IT executives. IT executives rely on these conferences to learn how to amplify the impact of the technology, insights and trends shaping the future of IT and business. Follow news and updates from the conferences on X using #GartnerSYM, and on the Gartner Newsroom.

Upcoming dates and locations for Gartner IT Symposium/Xpo include:
October 28-30 2024 | Tokyo, Japan
November 4-7 2024 | Barcelona, Spain
November 11-13 2024 | Kochi, India

About Gartner for High Tech

Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech.

Follow news and updates from Gartner for High Tech onX and LinkedIn using #GartnerHT.

About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit gartner.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241023644436/en/

Matt LoDolce
Gartner
matt.lodolce@gartner.com

Catherine Howley
Gartner
catherine.howley@gartner.com

Source: Gartner, Inc.