New research highlights a massive opportunity in IT, with spending projected to reach $8.2 trillion by 2031.
A recent study by Omdia forecasts a significant rise in corporate IT budgets, which are expected to grow from 4.2% of revenue in 2024 to 4.5% by 2031. This shift reflects the increasing reliance on technology and automation to streamline operations and drive business growth.
💡 AI and Automation Reshaping IT Budgets
The adoption of artificial intelligence (AI) and automation technologies is playing a crucial role in reshaping IT expenditure. As AI-powered tools become more integrated into business operations, companies are expected to allocate fewer resources to staff costs while increasing investments in infrastructure and software solutions.
Rather than leading to widespread job cuts, this transition is anticipated to slow hiring trends, allowing businesses to operate more efficiently with leaner teams. For instance, automation software is already being developed to manage workforce reductions in government sectors, signaling a broader trend of strategic workforce optimization through technology.
📈 Surging IT Investments in Infrastructure and Cloud
The report also highlights a significant increase in spending on IT infrastructure, particularly in cloud computing and storage solutions. Businesses are accelerating investments in GPU-enabled capabilities and cloud-based infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions to support advanced AI applications.
This trend was especially evident in 2024, when companies rushed to integrate generative AI (GenAI) technologies, leading to an unexpected spike in IT budgets. The demand for scalable and flexible infrastructure is expected to remain strong in the coming years.
📉 Short-Term Budget Adjustments in 2025
Despite the overall upward trajectory, Omdia projects a minor contraction in IT budgets in 2025. This reduction is attributed mainly to slower growth in staff-related expenses as companies focus on automation-driven efficiencies rather than expanding their IT teams.
Companies like Meta have already announced workforce reductions, with a 5% staff cut in early 2025. Similar hiring freezes and layoffs are expected across the industry as organizations refine their IT strategies to maximize efficiency without increasing headcount.
🌍 IT Investment Breakdown Across Business Sizes
Spending patterns vary significantly across different business sizes. In 2024, the average IT budget stood at:
- 💼 Small to Medium Businesses: $9 million
- 🏢 Enterprises: $75 million
- 🏦 Large Organizations: $1.1 billion
These figures highlight the growing importance of IT as a core business function, with larger organizations making substantial investments in cutting-edge technologies.
🔍 Future Projections: CloudOps and AI Integration
The CloudOps market, currently valued at $18.3 billion, is expected to more than double, reaching over $38 billion by 2030. This growth is fueled by a mix of emerging startups, established vendors expanding their cloud management capabilities, and strategic acquisitions in adjacent markets.
Omdia’s Chief Analyst, Roy Illsley, emphasizes that embedded GenAI in IT management tools will simplify operations and shift spending away from traditional IT staffing toward more strategic technological investments.
🚀 The Road Ahead
While IT budgets are projected to grow consistently through 2031, unforeseen global events could introduce volatility. Businesses must remain agile, leveraging automation and AI to stay competitive in an increasingly digital landscape.
With enterprises strategically reallocating resources, the future of IT spending will be shaped by a balance between innovation, automation, and cost efficiency.
