Growth in IT spending set to dwarf global rate

Growth in IT spending set to dwarf global rate

IT spending in Thailand is expected to register 4.2% growth in 2023, slightly slower than last year's level, weighed down by a projected contraction in spending on devices, according to research firm Gartner.

However, the country's growth rate this year is projected to be almost twice the global rate of 2.4%.

"Inflation, skills shortages and supply chain issues continue to have a significant impact across Thailand, driving chief information officers to be more hesitant, delay decisions or reorder priorities," said John-David Lovelock, distinguished vice-president analyst at Gartner.

"Despite these economic realities, we continue to see local enterprises increase spending on digital business initiatives."

IT spending in Thailand is forecast to reach 935 billion baht in 2023, up from 897 billion in 2022, which represented a growth rate of 4.4% year-on-year.

In 2023, double-digit growth is expected for spending on software and IT services, with the former forecast to surge 14.9% to 80 billion baht and the latter predicted to grow 10.4% to 109 billion as organisations are increasing spending on digital projects, said Mr Lovelock.

Spending on data centre systems is expected to grow 5.5% to 27 billion baht in 2023 and the outlay on communications service is estimated to rise 5.1% to 522 billion.

However, spending on devices is expected to dive 4.7% year-on-year to 195 billion baht this year, compared with a decline of 4.1% in 2022.

At the global level, IT spending is projected to reach US$4.5 trillion in 2023, up 2.4% year-on-year, down from the previous quarter's forecast of 5.1% growth.

According to Gartner, while inflation continues to erode consumer purchasing power and drive down spending on devices, overall enterprise IT spending is expected to remain strong.

"A turbulent economy has changed the context of business decisions and can cause chief information officers to become more hesitant, delay decisions or reorder priorities," said Mr Lovelock.

The software and IT services segments are projected to grow 9.3% and 5.5% in 2023, respectively. The devices segment is forecast to decline 5.1% this year as both consumers and enterprises lengthen device refresh cycles.

"During the height of the pandemic, employees and consumers refreshed their tablets, laptops and mobile phones because of remote work and education," he said. "Without a compelling reason for an upgrade, devices are being used for longer and the market is suffering."

The IT services market is growing as companies look to bring in outside IT staff for implementation and support, said Mr Lovelock. For example, spending on consulting is expected to reach almost $265 billion in 2023, a 6.7% increase from 2022.

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