RT team
According to Gartner’s latest forecast, worldwide IT expenditure will reach USD 5.61 trillion in 2025, marking a 9.8% rise from 2024. India’s IT spending is also set to climb 11.1%, hitting USD 161.51 billion. Yet, increasing costs might curb actual spending growth for CIOs, as John-David Lovelock, Gartner’s Distinguished VP Analyst, warns that much of the budget surge will be consumed by price inflation, dampening real-term expenditure. Data center systems, devices, and software could see double-digit growth, propelled by generative AI (GenAI) hardware updates that may not deliver substantial functional improvements.
Lovelock notes that GenAI is descending toward a “trough of disillusionment,” as expectations wane but spending remains robust. While AI-ready PCs lack decisive new applications, purchases of AI-enabled devices will continue, primarily unaffected by GenAI features. AI-optimized servers are projected to hit USD 202 billion in 2025, more than double that of traditional servers. He adds that by 2028, hyperscalers will hold USD 1 trillion worth of AI-optimized servers but will move beyond conventional IaaS models.
India’s data center systems segment is poised for a 19.1% uptick, nearly doubling its 2024 growth. Software and IT services will remain leading growth contributors, rising 16.9% and 11.2% respectively, as enterprises enhance AI infrastructure and seek cloudification, digitization, and consulting services. By 2026, GenAI will drive over half of application software spending. Meanwhile, a Capgemini report indicates 61% of Indian executives are optimistic for 2025, with 55% planning higher investments. Technology leads priorities, especially AI and GenAI, though 55% now emphasize cost efficiency over revenue gains.
