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IT spending trends point to CIO innovation

 

CIO approaches

CIOs will employ a number of tactics as they pursue the next wave of projects. For one, they will combine long-term planning with accelerated approaches stemming from COVID-19. For example, tech managers found sprints well suited for coping with the pandemic’s get-it-done-yesterday timelines, Lovelock said. Going forward, he anticipates CIOs using short-term sprints to reach first base with their long-term goals.

Forward thinking, meanwhile, will spark an increase in long-term contracts that accommodate three-to-five-year planning horizons. Inflation and the war for talent also encourage extended contract periods, Lovelock noted. Longer-term deals offer CIOs greater certainty regarding cost and the availability of technical skills, he said.

The skill shortage will also generate demand for external service providers such as consultants and MSPs. The Gartner forecast shows IT services growing to 7.9% year over year in 2022, hitting $1.3 trillion. The market watcher expects IT services’ spending growth to trail only enterprise software, which tops the Gartner forecast with a projected 11% year-over-year increase.

Business and technology consulting services will emerge as one of the fastest-growing sectors in IT services, growing at a 10% clip in 2022, Lovelock said. Cloud adoption will help drive that spurt. Gartner research suggests the vast majority of large organizations will hire external consultants to devise cloud strategies over the next few years.

Third-quarter 2021 data from the U.S. Census Bureau sheds additional light on the IT services industry, which continues to rebound from the pandemic’s economic disruption. Services providers offering infrastructure for hosting and related services generated 23.2% year-over-year growth in Q3, according to Census estimates. Companies providing computer systems design, which includes systems integration, grew 9.1%.

 

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