Excellence & Organization
IT budgets 2024: modest growth expected
by Rene Funke
IT budgets in 2024 continue to be characterised by economic uncertainty. Their predicted growth rate is lower than the expected cost increases for IT services. IT security budgets continue to grow at double-digit rates.
With an expected increase of 4.3 per cent compared to 2023, IT budgets will develop relatively modestly in 2024, at least in comparison to previous years. This is a result of the Metrics survey "2024 IT Agenda". In 2022, the increase in IT budgets has been 8.9 per cent, a catch-up effect from COVID-19. The trend reversal was already apparent twelve months ago, when respondents predicted an increase in IT budgets of just 4.8 per cent. The war in Ukraine and its economic consequences played a role here.
It is also clear that survey data should be treated with caution. But at least they provide an indicator of general business sentiment. In addition, figures vary widely between sectors. For example, respondents in the banking and insurance industry expect their 2024 IT budgets to increase by an average of 7.4 per cent.
IT security budgets in 2024
Companies are also cutting back on IT security budget growth in 2024. With an increase of 13.9 per cent, it is still growing strongly compared to the overall budget value, but the best years seem to be over. In 2021 and 2022, IT security budgets have increased by just under 20 per cent and 21 per cent respectively. However, the study also shows information security, IT security and cyber security remain at the top of the list of strategic IT areas, followed by the perennial favourite, digitalisation, and a new third place finisher, governance & compliance. Searching for IT talent has lost some ground, while artificial intelligence (AI) is the clear climber on the 2024 strategic agenda.
IT costs continue to rise
As in 2023, IT budgets are again expected to grow more slowly than costs. Applications in particular: Respondents expect a cost increase of 8.15 per cent in 2024. Because business applications are absolutely critical to success, Marc Andreessen's vision that "software is eating the world" is likely to come to fruition here. While the demand for IT talent is cooling, daily rates for external consultants are expected to soar. The forecast for 2024 is an increase of 6.97 per cent. Workplace, network and infrastructure - so-called commodities - as well as IT staff salaries and freelancers' daily rates are forecast to increase by between five and six per cent in 2024.
You are welcome to request the free survey, which will be available from early 2024.