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Gartner predicts surge in government IT spending in post-pandemic catch-up

'Unprecedented public demand' as dear leaders heave services for world+dog online

Gartner is forecasting that governments the world over will splash more than half a trillion dollars on IT next year, a year-on-year growth in spending of 6.5 per cent.

The analyst and research organisation said public sector IT budgets would hit $557.3bn in 2022, 64 per cent of which would go on IT services and software to improve responsiveness and resilience of public services.

To put that in perspective, the analyst said the world's governments spent $459.425bn on IT in 2020 - so the 2022 figure would be a 21 per cent increase on the first year of pandemic spending.

It did not say whether this would be partly due to the increase in label price seen on some componentry across the industry, although it did cite "unprecedented public demand."

“Governments will continue to accelerate investments in digital technologies to respond and recover from the continuing evolution of public health uncertainties due to the COVID-19 pandemic,” said Irma Fabular, research vice president at Gartner, in a pre-canned statement.

“The disruptions caused by the pandemic have also reinforced a key digital government tenet, which is public policy and technology are inseparable,” she said.

So-called “digital technologies” include investments in enhancing customer and employee experience, strengthening analytical capabilities and scaling operational agility, Gartner said.

Breaking down government IT spending, Gartner said figures for software would increase by 12 per cent in 2022 to reach $151.9bn, while spending on services would increase by 8 per cent to hit $203.9bn over the same period.

The COVID-19 pandemic, which began to sweep through western nations from February 2020, would continue to influence government IT strategy going into next year, Gartner said. It estimates that by 2025, more than half of government agencies will have modernised critical core legacy applications to improve resilience and agility.

“Governments are rethinking their public cloud strategies to accelerate IT modernisation, improve efficiencies and increase data security,” said Fabular.

Segment 2021 Spending 2021 Growth (%) 2022 Spending 2022 Growth (%)
IT Services $188,069,000,000 10.9% $203,922,000,000 8.4%
Software $135,630,000,000 14.9% $151,885,000,000 12.0%
Telecom Services $61,482,000,000 1.4% $60,996,000,000 -0.8%
Internal Services $64,245,000,000 0.3% $65,971,000,000 2.7%
Devices $41,049,000,000 17.6% $40,390,000,000 -1.6%
Data Centre $32,735,000,000 6.5% $34,154,000,000 4.3%
Total $523,212,000,000 9.5% $557,318,000,000 6.5%

The only areas of spending likely to see government investment fall next year, at least according to Garter, would be spending on devices (falling 1.6 per cent to $40.4bn) and telecoms services, falling nearly 1 per cent to $60.9bn.

For devices, shortages of semiconductors is likely to constrain how much vendors are able to supply.

For example, two of the world's largest three PC-makers – HP and Dell – told last week of how backlogs and supply chain difficulties were continuing to affect production.

"Today, our business is totally driven by supply," HP CEO Enrique Lores said last week. ®

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