As each year starts to wind down there are always forecasts about what to expect in the coming year. 2024 has been all about generative-AI in the IT world. That GenAI spending theme is expected to continue in 2025, but there is a new forecast that merits some attention about slower spending growth of data center systems from Gartner Group ahead of its Gartner IT Symposium/Xpo.

The overall IT market is anticipated to remain strong heading into 2025 as Gartner Group projects a 9.3% total global IT spending gain to $5.74 trillion. Generative-AI remains the buzz, but the forecast of higher spending but moderating expectations of what can be done in GenAI may capture some attention. One longer-term figure which should greatly stand out is that the IT spending is expected to hit the $7 trillion mark in 2028.

According to Gartner’s assessments, data center systems spending grew by nearly 35% (to $318 billion) in 2024. Data center systems spending growth is forecast to slow to 15.5% growth (still up to $367 billion) in 2025. This growth will be led by server sales. Gartner is now forecasting that the $134 billion spent in 2024 will rise over $257 billion in 2025 and then up to a round-trip tripling of $332 billion by 2028.

John-David Lovelock, Distinguished VP Analyst at Gartner, said in the report:

“Current spending on generative AI (GenAI) has been predominantly from technology companies building the supply-side infrastructure for GenAI. CIOs will begin to spend on GenAI, beyond proof-of-concept work, starting in 2025. More money will be spent, but the expectations that CIOs have for the capabilities of GenAI will drop. The reality of what can be accomplished with current GenAI models, and the state of CIO’s data will not meet today’s lofty expectations.”

“GenAI will easily eclipse the effects that cloud and outsourcing vendors had on previous years regarding data center systems. It took 20 years for the cloud and outsourcing vendors to build up spending to $67 billion a year on servers. The demand of GenAI will help nearly triple server sales from 2023 to 2028.”

Spending on software is now forecast to rise 14% to $1.23 billion in 2025, outpacing the 11.7% growth in 2024. The total spending on IT services is expected to rise by 9.4% to $1.73 billion in 2025, also outpacing the 5.6% spending growth in 2024. This is also being shown as AI and GenAI, including email and authoring.

The total IT spending growth table has been provided below and the Dollars are in millions:

Just two days earlier, Gartner Group’s top 10 strategic tech trends for 2025 projects that it will span “AI imperatives and risks, new frontiers of computing and human-machine synergy.” The first trend addressed dealt with Agentic AI. Gartner’s report said:

Agentic AI systems autonomously plan and take actions to meet user-defined goals. Agentic AI offers the promise of a virtual workforce that can offload and augment human work. Gartner predicts that by 2028, at least 15% of day-to-day work decisions will be made autonomously through agentic AI, up from 0% in 2024.