Gartner just cut its projected growth rate in worldwide IT spending in 2023 by more than half, dropping the overall rate to 2.4%. This is down from 5.1% in the research firm's forecast from the previous quarter.

Worldwide IT spending is projected to total $4.5 trillion in 2023, This number includes telco revenues of about $1.4 trillion, up only 0.1% from 2022.

Enterprise software sales still look strong, coming in at $856 billion in the new forecast, up 9.3% from 2022. IT services are forecast to grow 5.5%, to reach more than $1.3 trillion. Spending on data centers is forecast to be almost flat, growing 0.7% during the year to $213 billion.

The category of “devices,” which includes laptops, tablets, and phones, takes the big hit in the new forecast, dropping 5.1% to $685 billion.

“Consumers and enterprises are facing very different economic realities,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown.”

"Softening" Cloud Growth
The Gartner report comes as Reuters reports a “softening” in the public cloud-computing market, “after years of blistering growth.” Most industries would love to such a problem, as the Reuters report still shows year-on-year growth in 2023 of 20.7% for Azure, almost 30% for AWS, and slightly more than 30% for Google Cloud.