LONDON--(BUSINESS WIRE)--Feb. 25, 2025-- Recent research from Omdia reveals that global IT budgets are projected to reach $12 trillion by 2031, with $8.2 trillion representing IT investment opportunities. The remaining $3.8 trillion will be allocated to staff costs and other operational expenses.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250225552113/en/

Figure 1: Total IT budgets by 2031 (Graphic: Business Wire)

Omdia forecasts that IT budgets will continue to grow as a proportion of corporate revenue, rising from 4.2% in 2024 to 4.5% by 2031. Applications will remain the largest IT budget category increasing by $1.3 trillion over this period.

The rise of AI as co-pilots and agents is expected to influence IT spending, reducing the proportion allocated to staff costs. However, rather than triggering mass layoffs, this shift will likely lead to a slowdown in hiring as IT headcount growth lags behind business expansion. Ultimately, AI-driven efficiencies will enable IT teams to support business growth while maintaining leaner staffing levels.

IT budgets experienced a significant surge in 2024 exceeding previous forecasts. This sharp increase was fueled by the rapid adoption of growth in generative AI (GenAI) as enterprises rushed to keep up with this fast-evolving technology. The most notable budget spikes were in infrastructure investments with organizations either acquiring GPU-enabled capabilities and expanded storage or leveraging cloud IaaS and PaaS for model training and application development.

Omdia expects IT budgets to slightly contract in 2025, though IT spending will continue to claim a growing share of corporate budgets. The primary driver of this dip is slower growth in staff costs, as businesses focus on automation and GenAI-driven efficiencies rather than expanding IT headcount. For example, Meta announced a 5% workforce reduction in January 2025, and similar layoffs or hiring freezes are anticipated across the industry.

As GenAI automates more tasks, CIOs are expected to optimize existing IT teams rather than significantly expand them enabling businesses to scale operations without proportional increases in staffing.

IT budgets will continue to grow as a share of organizational revenue reaching 4.5% globally by 2031. However, spending varies significantly by company size. In 2024, the average IT budget stands at approximately $9 million for small to medium businesses, $75 million for enterprises, and $1.1 billion for large organizations.

According to Omdia’s Chief Analyst Roy Illsley, “The CloudOps market remains in flux, with a mix of emerging startups, established vendors expanding their management capabilities, and acquisitions in adjacent markets acquiring the technology. Omdia’s projects that the CloudOps market, valued at $18.3 billion in 2023, will more than double to over $38 billion by 2030.”

The enterprise IT opportunity - representing the portion of IT budgets allocated to technology products and services – is set to grow from $5.06 trillion in 2024 to $8.2 trillion by 2031, a $3.14 trillion increase (see Figure 2). Among IT sub-categories, Applications will see the largest spending growth, rising by $1.1 trillion, while Management will experience the lowest growth, increasing by $400 billion over the same period.

Illsley further noted: “Many CIOs recognize that embedded GenAI in management tools and solutions will simplify their use. As a result, IT budgets are shifting, internal spending on IT staff is expected to grow more slowly than other budget areas, freeing up funds to address other business challenges. However, if these expected benefits fail to materialize, discretionary IT spending will likely be reduced.”

“The forecast indicates steady growth from 2024 to 2031, but the impact of ‘black swan’ events could introduce greater volatility,” concludes Illsley.

ABOUT OMDIA

Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225552113/en/

Fasiha Khan- fasiha.khan@omdia.com

Source: Omdia