This increase is despite all the layoffs and complaints from big tech that they were suffering from a bad case of headwinds.

In fact Gartner VP analyst John-David Lovelock specifically said that “Macroeconomic headwinds were not slowing digital transformation.”

“IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023. Prioritisation will be critical as CIOs look to optimise spend while using digital technology to transform the company’s value proposition, revenue and client interactions.”

He said the software segment will see double-digit growth this year as enterprises prioritise spending to capture competitive advantages through increased productivity, automation and other software-driven transformation initiatives. Conversely, the devices segment will decline nearly five per cent in 2023, as consumers defer device purchases due to declining purchasing power and a lack of incentive to buy.

Lovelock said that CIOs faced a balancing act that is evident in the dichotomies in IT spending.

“For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services.”

The IT services segment will continue its growth trajectory through 2024, largely driven by the infrastructure-as-a-service market, which is projected to reach over 30 per cent growth this year. For the first time, price is a key driver of increased spend for cloud services segments, rather than just increased usage.

The collapse of Silicon Valley Bank, Signature Bank, and Credit Suisse created a shockwave within the banking and tech industries. While exposure remains relatively contained, tech startups are likely to face renewed questions and scrutiny from stakeholders, clients and prospects, he said.

Meanwhile, the tech industry has to cope with a critical shortage of skilled workers after having made a move to get rid of them all.

Lovelock said that there was a critical shortage of skilled IT labour. The demand for tech talent greatly outstrips the supply, which will continue until at least 2026 based on forecast IT spend.

“Tech layoffs do not mean that the IT talent shortage is over.. IT spending on internal services is slowing in all industries, and enterprises are not keep up with wage rate increases. As a result, enterprises will spend more money to retain fewer staff and will turn to IT services firms to fill in the gaps,” he said.