Gartner Forecasts Worldwide Government IT Spending to Grow 5% in 2022

Worldwide government IT spending is forecast to total $565.7 billion in 2022, an increase of 5% from 2021, according to Gartner, Inc.

“The last few years of enduring pandemic challenges have mobilized a wave of digital transformation activities in government organizations across the world,” said Daniel Snyder, director analyst at Gartner. “Governments are executing innovative activities by harnessing technology to streamline digital services, advance automation processes and evolve citizen experiences.”

In 2022, government IT spending is forecast to increase across all segments except internal services and telecom services. Continuing the trend from 2021, software is forecast to record the strongest growth across all segments in 2022. As legacy modernization continues to be a priority in government organizations, growth in the data center systems segment will continue to slow though the forecast period (see Table 1).

Table 1. Worldwide Government IT Spending, 2021-2022 (Millions of U.S. Dollars)

 

2021 Spending

2021 Growth (%)

2022 Spending

2022 Growth (%)

2023 Spending

2023 Growth (%)

Data Center Systems

25,085

7.3

26,137

4.2

26,642

1.9

Devices

37,484

13.0

37,823

0.9

37,389

-1.1

Internal Services

68,241

-2.1

68,188

-0.1

70,767

3.8

IT Services

191,841

10.7

204,206

6.5

220,997

8.2

Software

146,952

16.9

162,278

10.4

183,012

12.8

Telecom Services

69,190

1.1

67,102

-3.0

67,193

0.1

Total

538,793

9.1

565,734

5.0

606,000

100.0

Source: Gartner (June 2022)

Governments continue to invest in critical application software that directly support end user interfaces driving strong growth in this segment. Spending on telecom services is set to decrease in 2022 as governments reduce spending on expensive legacy systems in favor of digital service delivery models.

Anything-as-a-Service Model Emerges as Pay-As-You-Use Gains Momentum

Anything-as-a-Service (XaaS) is gaining popularity across government organizations as it provides better return on investment normalizing IT spend over time making budgeting for IT more predictable, while avoiding the accrual of technical debt. Gartner predicts that by 2026, most government agencies’ new IT investments will be made in XaaS solutions.

“The pandemic sped up public-sector adoption of cloud solutions and the XaaS model for accelerated legacy modernization and new service implementations,” said Snyder. “Fifty-four percent of government CIOs responding to the 2022 Gartner CIO Survey indicated that they expect to allocate additional funding to cloud platforms in 2022, while 35% will decrease investments in legacy infrastructure and data center technologies.”

With the ongoing talent challenges facing organizations, XaaS makes it easier for government organizations to find the right talent via XaaS operating models. XaaS delivery models require different internal IT skill sets and place less demand on the organization to develop or acquire emerging IT skills, which are often hard to find and difficult for governments to afford.

Gartner clients can read more in “Forecast: Enterprise IT Spending for the Government and Education Markets, Worldwide, 2020-2026, 1Q22 Update.”

Learn more about key government technology trends in the complimentary Gartner ebook Top Technology Trends in Government for 2022.

About Gartner for Information Technology Executives

Gartner for Information Technology Executives provides actionable, objective insight to CIOs and IT leaders to help them drive their organizations through digital transformation and lead business growth. Additional information is available at www.gartner.com/en/information-technology.

Follow news and updates from Gartner for IT Executives on Twitter and LinkedIn. Visit the IT Newsroom for more information and insights.

Exit mobile version