Global IT spending is anticipated to hit $5.61 trillion by 2025, indicating a 9.8% rise compared to 2024, based on Gartner’s most recent prediction. In India, IT expenditures are projected to increase by 11.1%, totaling $161.51 billion during the same timeframe. Yet, even with the increased budgets for CIOs, a significant portion of the growth will probably be consumed by rising expenses, affecting real IT expenditures.

“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, distinguished VP analyst at Gartner. “This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”

Segments including data center systems, devices, and software are anticipated to see double-digit growth in 2025, primarily fueled by upgrades in generative AI (GenAI) hardware. Nonetheless, these improvements are not expected to offer substantial enhancements in performance.

“GenAI is sliding toward the trough of disillusionment, which reflects CIOs’ declining expectations for GenAI but not their spending on this technology,” Lovelock noted. “For instance, the new AI-ready PCs do not yet have ‘must-have’ applications that fully utilize the hardware. While both consumers and enterprises will purchase AI-enabled PCs, tablets, and mobile phones, these purchases will not be heavily influenced by GenAI functionality.”