Hi there, and welcome to the latest edition of the Forbes CIO newsletter.
Last year was a blistering one for tech spending, which grew by almost 10% over 2020. Gartner just released its forecast for 2022 and it sees something of a slowdown ahead, with total spending expected to rise to $4.4 trillion, a year-over-year increase of 4%.
But when you consider this will take place against a backdrop of escalating geopolitical tensions, an ongoing pandemic that has seen parts of China plunged into lockdown again and the return of serious inflation concerns, it's still quite impressive. It's also indicative of just how central software has become to companies' fortunes.
In a post about Gartner's forecast, Forbes CIO Network Contributor Vijay Gurbaxani says the statistics reveal a clear shift in how CIOs are delivering technology services to businesses. Gurbaxani, who is the director of the Center for Digital Transformation at University of California, Irvine (disclosure: I'm an unpaid senior industry fellow at the center, where I occasionally help moderate events), points out that increases in spending on software and IT services outpace those in other categories.
That reflects a greater reliance on third-party suppliers to deliver key tech, especially in the domain of cloud services. Boeing's CIO, Susan Doniz, recently signed a huge, multicloud deal with Amazon, Google and Microsoft, and many other CIOs have launched journeys to the public cloud, or to hybrid ones. (For more news about Boeing, see our careers section later in the newsletter.)
At the same time as tech leaders are heading to the cloud, they're also beefing up their own internal software development teams, which need powerful tools to help their companies stay ahead of the competition. And that, in turn, will keep driving up spending on software. This double-barreled spending machine—cloud services plus software innovation engines—will likely add another trillion or more to those forecasts in the not-too-distant future.
Thanks for reading, and do let me know if you have any suggestions for themes to cover in future issues. You can contact me on Twitter here and LinkedIn here.
P.S. A very, very exciting announcement! For the first time in a couple of years, we'll be holding our flagship Forbes CIO Summit in person (yay!). The event at the Ritz Carlton Hotel Half Moon Bay, California on May 23 and 24 is reserved for CIOs and executives with equivalent job titles such as CTO from large and innovative companies. We will also be live-streaming a portion of the summit and will share more details about that soon. You can apply to attend here.
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