Understanding the IT spend of your market is critical for crafting your go-to-market strategy, surfacing insights on customer budgets and priorities, readiness to adopt new solutions, and major market changes. 

We release HG Insights’ unique forward-facing IT Spend Model twice a year, taking into account updates in underlying data inputs—including technographic and contract data, country-level GDP data, public releases from IDC and Gartner—model assumptions, and shifts and trends in the overall IT spending landscape. Below you'll find release notes for updates to the model.

HG Insights Spend Model H2 2024

We're excited to announce the new Spend Model will be visible in Platform the week of December 16, 2024. Read on for what's included.

👀 The IT Spend Model at a Glance 

The headline figure is a projected increase of 5.4% in enterprise IT spending globally, reaching $6.1 trillion. External spend, representing the proportion of enterprise IT budgets spent on IT products and services with third-party vendors, is forecast to increase by 12%, reaching $4.6 trillion. 

These top-level global values are reached by aggregating account-level spend across the universe of companies covered by HG Insights’ model. This currently covers more than 700,000 companies across manufacturing, wholesale trade, banking and financial services, and retail trade (among other industries), representing a very significant majority of global enterprise spend. 

As ever, there are a number of macroeconomic and geopolitical factors at play that impact enterprise IT spending behaviors. These include an uncertain global economic picture, high interest rates, regional conflicts, supply chain issues, and a complex regulatory and compliance landscape. These factors do not operate in isolation, and their impact on IT spending cannot be measured independently. Instead, the new model represents HG Insights’ current projection of how enterprises globally will manage their IT spending over the upcoming 12 months against a backdrop of diverse and complex market conditions. 

HG Insights expects that companies will continue to invest in IT to drive growth, innovation, and to enhance their resilience in a fast-changing environment, reflected in the projected 8% growth in external spend. The change in spend at the account-level depends on the firmographic profile of each company and its subsidiaries, as per HG’s spend model build methodology. 

🌟 Category Highlights 

Within external spend, IT budgets are broken down initially into Hardware, Software, Services and Communications categories. 

• Hardware spend is forecast to increase by 15%, driven by global investments in Server and Storage spend, underpinning the ongoing migration towards Cloud. The biggest single increase in Hardware spending is associated with Client Computing, and specifically Components. This area is seeing very significantly increased global spend, specifically on GPUs to facilitate the AI investments and initiatives being explored by enterprises across the world.
  
  
• Software spend is forecast to increase by 15%, with the growth coming mainly from the Software Infrastructure category, alongside Enterprise Applications.
  
  
• Enterprise Applications spend is increasing across the board, and particularly in Enterprise Resource Planning Applications, alongside significant growth in Industry Specific Applications. CRM spend is expected to increase by ~13%, driven by an ever-increasing enterprise focus on customer understanding, retention and experience. Higher spend on Industry Specific Applications reflects the complexity of challenges enterprises face across certain sectors, in areas such as compliance and workflow management. Within ERP, Financial Applications and Supply Chain Management Applications in particular are expected to see strong growth over the next 12 months.

• Software Infrastructure spending is expected to increase very significantly, with growth across all sub-categories set to increase around 50% over the next 12 months. This includes increasing spend on Information Management, Operating Systems, Operations Management, Security, Storage Management, and Virtualization. Across many of these key categories, a continued Enterprise focus on reducing costs while improving efficiency, scalability, and building resiliency underpins a higher Software Infrastructure spend.
  
  
• Furthermore, the increased spend associated with Software Infrastructure is shaped significantly by the boost to Software Security spend, which is part of a broader reconfiguration of HG’s view of global security spend across both Hardware and Software. Globally, Hardware Security spend is declining as the long-standing shift away from on-prem and towards cloud will continue, and companies maintain less of their hardware infrastructure. But as a whole, Security spending is increasing significantly in response to the myriad risks and threats enterprises face, with spending on Information and Threat Management solutions projected to be particularly high.
  
  
• The significantly increased spend on IT Services at 10% is focused on continued investment in Cloud Services. Application and Infrastructure-Led Outsourcing and Consulting and System Integration are other areas of IT services expected to see significant growth of 10-14% over the next 12 months. Within Cloud Services, both Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) are set to see strong growth as companies shift more of their workloads to the cloud. 

💻 What's happening with AI?

• Enterprise spending on AI is projected to increase significantly over the next 12 months as companies explore how best to leverage AI technologies and solutions across their businesses. Due to AI's scale and diversity as a rapidly evolving technology, it is not represented in any single category within HG’s standard IT spend model; rather, it touches dozens of the existing spend categories across hardware, software and services.