While the software segment is expected to grow double digits, device spending will sink 8.6% this year thanks to the impact of inflation on consumer purchasing power.
“The devices segment is experiencing one of its worst growth years on record,” said Lovelock. “Even as inflation eases slightly in some regions, macroeconomic factors are still negatively impacting discretionary spending and lengthening device refresh cycles. Devices spending is not expected to recover to 2021 levels until at least 2026.”
Generative AI isn’t yet impacting IT spending levels, the firm said, which expects the gen AI long-game to include its incorporation into existing spending.
“Generative AI’s best channel to market is through the software, hardware, and services that organizations are already using,” said Lovelock. “Every year, new features are added to tech products and services as add-ons or upgrades. Most enterprises will incorporate generative AI in a slow and controlled manner through upgrades to tools that are already built into IT budgets.”
He noted that while organizations will be fine without having AI in production, developing their AI story and a strategy remains critical.
This story originally appeared on CGT, a sister publication of RIS News.