Dive Brief:
- Global tech spend will grow 5.6% this year to $4.9 trillion, driven by investments in cybersecurity, cloud and generative AI technologies, according to Forrester.
- The analyst firm expects the U.S. market to top $2 trillion for the first time, driven by heavy investing from financial services, insurance, government, media and professional services organizations.
- Domestic tech spend accounted for 41% of the $4.7 trillion global market in 2024, Forrester said. The U.S. share of the AI software products and services segment was slightly higher, comprising 46% of the global market.
Dive Insight:
Generative AI lit a fire beneath the massive global technology market, igniting growth in cloud, software and data center infrastructure, but there were other spending accelerants.
Enterprises saw application costs creep up as vendors increased prices and shadow IT added to software sprawl. Among organizations grappling with higher software costs, over half pointed to growing reliance on SaaS products, according to a mid-year Forrester survey.
Specific vendors have highlighted the trend toward more spend.
VMware customers are still navigating a major shift to subscription-based pricing implemented by Broadcom after the chipmaker finalized its acquisition of the ubiquitous virtualization software provider at the end of 2023. Forrester reported that some users experienced up to fivefold cost increases as Broadcom bundled the vast VMware portfolio into a small number of packaged offerings.
Software and IT services are poised to grow nearly 11% and 4%, respectively, this year. They remain the two largest categories Forrester tracks and will account for an estimated two-thirds of global tech spend in 2025.
The firm also anticipates sizable growth in PCs following a prolonged market slump, as enterprises upgrade to Windows 11 and enter a device refresh cycle. A new class of AI-capable PCs will help drive up spending in the category 8.5% globally.
