Gartner: 5 Big IT Markets For Governments; SaaS, IT Services Top List
New data from Gartner reveals the top five IT markets in which governments from across the globe will spend more than $560 billion on, including SaaS, devices and IT services.
Governments across the globe will spend a whopping $590 billion this year on technology and IT services as they pour billions of dollars into replacing legacy applications.
Worldwide government IT spending will increase 7.6 percent annually in 2023 to $590 billion, up from $548 billion in 2022, according to new data from IT research firm Gartner.
“Governments are increasingly spending their IT budgets to replace legacy applications,” said Apeksha Kaushik, principal analyst at Gartner, in a statement.
The five largest spending markets governments will spend money on in 2023 are: IT services, software and SaaS, internal services, telecom services and devices. Combined, these five IT market segments will generate approximately $563 billion in sales from government customers around the world.
Governments Increase IT Budgets In 2023
Gartner pointed out some of the main reasons why government spending will increase 7.6 percent in 2023.
“Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organizational accountability,” said Kaushik. “In addition, the ‘great resignation’ and the competing demand from the commercial sector have forced governments to re-examine their approaches to counterbalance internal talent scarcity.”
In fact, a 2023 Gartner survey of CIOs and technology executives showed that 57 percent of government CIOs plan to increase funding for application modernization in 2023, up from 42 percent in 2022.
This year, governments are also making sure their digital projects endure their mission impact. Gartner said an increasing number of government institutions are already putting in place at least one digital metric linked directly to outcomes associated with their organization’s public purpose or mission.
By 2026, Gartner expects over 75 percent of governments will gauge digital transformation success by measuring the enduring mission impact.
CRN breaks down the five largest technology markets where Gartner expects governments to spend the most money in 2023.