According to a report by IT consulting and research firm, Gartner, global IT spending contracted by 0.2% in 2022, reaching a total of $4.38 trillion. This marked a rare instance of corporations spending less on digital business tools than in the previous year.

The firm had initially estimated a growth of 0.8% in IT spending for the year, but has now revised its forecast to a 2.4% increase for 2023, citing ongoing economic uncertainties as the primary cause for the change.

One of the areas that have seen the greatest cuts is in the devices segment, including PCs, smartphones, and other devices, which saw a surge in spending in the wake of the COVID-19 outbreak to support remote work. The devices segment of the spending forecast is projected to fall 5.1% this year, to roughly $685 billion, following a more than 10% drop in 2022.

However, spending on business software and IT services is expected to remain steady year-over-year, accounting for more than $2.16 trillion in projected spending in 2023. Within IT services, spending on consulting services alone is projected to reach $264 billion, representing a 6.7% increase from 2022.