Strategic IT Investments for 2024: Technology Spending Forecast Revealed

Introduction

Strategic Information Technology (IT) investments for 2024 gain a broader dimension when we consider not only global projections, but also the specific perspectives of Latin America and Brazil. In this article, we combine the crucial insights from the IT Spend Forecast 2024 report by Gartner, with the detailed predictions from the IDC FutureScape for the IT industry in Latin America, and data from the FGV Survey on IT Use in Companies.

The studies are a treasure trove of strategic insights, designed to empower CIOs, CTOs, IT and Innovation leaders with the knowledge necessary to make informed decisions in a challenging and constantly evolving digital landscape. By leveraging the projections and best practices outlined in this article, companies can position themselves for success and sustainable growth.

Global IT Investment Growth Projections

According to Gartner, global IT spending is expected to reach $5 trillion in 2024, with an average growth of 7.3% compared to 2023. This increase is mainly driven by growth in software and IT services spending, as well as the constant evolution towards the digitalization of various businesses and the creation of new business models that are born 100% digital.

IT Investment Growth Projections in Latin America

Starting in 2024, Latin America expects more stable growth in IT companies compared to the US, as indicated by the IDC FutureScape: Latin America IT Industry Predictions 2024.

The forecasts highlight that the IT industry in Latin America will have significant growth of around 11%, considered an important milestone in the perspectives for certain technologies. Specific countries are also mentioned, with Argentina projecting 7% growth, Mexico predicting a 10% increase, and Brazil leading with 12% growth. Peru and Chile are also optimistic, expecting 11% growth in 2024.

Compared to mature economies like the US, which is expected to grow only 9% in 2024, Latin America demonstrates a promising outlook for the IT sector in the region.

Brazil’s Position in the IT Investment Map

The growth of IT investment by companies operating in Brazil, according to the Gartner study, is below the global average, as well as countries like China, Mexico, France, Chile, Japan and South Korea, to name a few. On the other hand, companies from other countries are expected to invest in technology at a level above the global average, such as: India, United States, Israel, Singapore and Canada.

The expected growth of IT investment in Brazil had a slight change compared to 2023. Last year, the growth forecast was just over 3%, while in 2024 the expected growth is almost 2%. Most countries have a growth expectation for 2024 below the expectation in 2023, except for cases such as: Malaysia, Thailand, South Korea, Germany, Saudi Arabia, among others.

In summary, and by cross-referencing the two studies, the IT industry in Brazil is expected to grow 12% in 2024, with an increase in IT investment of only 2%.

The FGV study evaluates that over the last 35 years, Brazilian companies have recorded an annual growth of 6% in technology-related expenses on average, rising from 1.3% in 1988 to 9% in 2022/23.

Another indicator evaluated in the study is the CAPU – Annual IT Cost per User, totaling R thousand. This value represents IT expenditures and investments by companies divided by the number of employees of the respective companies. It is important to highlight that this indicator does not follow economies of scale, growing proportionally to company size and varying by sector. In service companies, the average is R thousand; in industry, R thousand; in retail, R thousand; and in banks, R thousand.

Sectors and Technology Investments at the Global Level

At the global level, different market segments tend to have an increase in technology investment, such as the Financial, Insurance, Health, Education, Hospital and IT Services sectors. On the other hand, there are segments that are below the global average when it comes to increasing technology investment, such as Oil/Energy, manufacturing industries, air transport, telecommunications and retail, to name a few.

According to the studies, looking at global companies’ costs in areas related to technology, only the hardware support, printers and copiers sectors will see a decrease in investment in 2024. The areas that will see the highest investment increase compared to 2023 are: BI & Analytics, ERP/SCN/CRM, Infrastructure and IT Consulting.

Artificial Intelligence Investments in 2024

It is estimated that between 2023 and 2027, $3 trillion will be spent on Artificial Intelligence. By 2027, Generative AI (AI for creating new content, such as text, images, music, audio and videos, using models capable of performing multiple tasks simultaneously, in addition to summaries, questions and answers, classifications, etc.) is expected to represent 36% of total AI spending, and AI spending in general will represent 16% of total IT spending.

The predictions for 2030 are even more incredible. By then, every dollar of GDP created anywhere on the planet will be influenced by AI, 100% of global IT spending will be directly on AI or will indirectly support AI, 100% of IT development will incorporate AI in design, development, testing or production support, and every person in a developed country will have an interaction with at least one instance of AI every day.

Information Security Investments in 2024

It is estimated that information security spending will grow 12.5% in 2024, with the highest growth in: consent and preference management, cloud workload protection platforms, threat intelligence software, vulnerability assessment software, integrated risk management for performance, automated subject rights requests, enterprise endpoint protection platform software, tokenization software, gateway software, encryption software, network detection and response, and web application firewall software.

On the other hand, areas with below-average spending increases are: privileged access management software, integrated risk management for resilience, integrated risk management for compliance, hardware support, and integrated risk management for assurance.

Cloud Investments in 2024

Cloud investments continue to increase, but at a slower pace year over year. In 2022, growth was 25.8%, totaling $83 billion, in 2023 growth was 17.8%, totaling $81 billion, and in 2024 the projected growth is 19%, totaling $107 billion. The outlook for the following years is optimistic, with cloud investment growth in 2025 at 20.9%, totaling $153 billion, in 2026 at 19.7%, totaling $170 billion, in 2027 at 18.3%, totaling $186 billion.

Looking at the Cloud Software category, the systems that received the highest investment increase in 2023 were, respectively: Business Intelligence applications and platforms, Supply Chain Management, Database Management Systems, Email and Authoring, Application Development, Enterprise Resource Planning, Customer Experience and Relationship Management (CRM), Application Infrastructure and Middleware, Content Services, and Project and Portfolio Management.

Growth Projections in Specific Sectors

The studies also present detailed investment growth projections for specific IT sectors. We highlight below the main growth projections for 2024:

• Communications Services: 2.1% growth.
• Devices: 7.2% growth.
• Infrastructure Services: 7.7% growth.
• Enterprise Applications: 8.1% growth.
• Mobile Network Services: 9% growth.
• IT Services: 10.3% growth.
• Software: 13.5% growth.

The 2024 investment growth rates reflect the dynamic demands and technological evolutions in strategic IT sectors. The 2.1% growth in Communications Services can be attributed to market maturity, seeking optimization and convergence of services to achieve operational efficiency. The 7.2% growth in Devices reflects the incessant demand for innovative hardware, driven by the rapid obsolescence of existing devices and the integration of emerging technologies such as IoT and 5G connectivity, encouraging companies to invest in more advanced equipment.

The 7.7% growth in Infrastructure Services is directly linked to the continuous need for companies to modernize their technological environments and legacy systems, migrating to the cloud and strengthening cybersecurity. In the Enterprise Applications sector, with an 8.1% increase, investment is driven by the incessant search for advanced solutions, aiming to optimize processes, promote operational efficiency and deliver integrated experiences. The Mobile Network Services segment shows robust 9% growth, indicating society’s growing dependence on mobile devices, especially with the expansion of 5G, stimulating investment in faster and more efficient networks.

IT Services show notable 10.3% growth, highlighting the growing need for specialized support, such as that provided by Zappts, in a dynamic technological landscape, while the significant 13.5% growth in the Software sector reflects the increasing importance of technology solutions in companies’ digital transformation, ranging from enterprise applications to cybersecurity. These growth rates point to a scenario of strategic investments aligned with emerging market demands and the evolutionary needs of organizations.

Conclusion

By considering these projections, Zappts reaffirms its commitment to helping its clients and partners take full advantage of the opportunities provided by digital transformation. The picture drawn by FGV demonstrates the importance and interdependence of technology in Brazilian businesses. The IDC projections provide a comprehensive view of emerging trends in Latin America, aligning with and complementing the global forecasts presented by Gartner. This convergence of information offers a more complete view of the constantly evolving technological landscape, enabling companies to prepare strategically for the opportunities and challenges of the digital future.

Stay ahead of trends, adjust your approach and be prepared to lead in the constantly evolving digital era with our support. Transformation is ahead of us, and we are here to help you on this dynamic path.

About Zappts

Since 2014 in the market, Zappts supports leading market brands such as Porto, Getnet, BTG Pactual, Cateno, Ambev, Multilaser, Ultragaz, C&A and Burger King, among others, ensuring scalability of digital experiences. Focused on software development, especially in Front-end, UX Design, Quality Assurance and Cloud Environment Management, it acts in the planning, management and operation of corporate digital solution development services, environment management and knowledge transfer through information technology.

We are a reference company in creating digital experiences for users, in addition to developing innovative and fast solutions, operating in a 100% remote model, with teams distributed across more than 18 states in Brazil.

To learn more about how Zappts can help your company, click here, and talk to our specialists.