IT and Technology Spending & Budgets for 2025: Trends & Forecasts

While the tech sector has faced dramatic highs and lows since the start of the pandemic, the past five years have significantly changed how we communicate and work. As we enter a new year, spending on technology and IT infrastructure is a tactical imperative for businesses, governments, and all large organizations and entities.

Across regions globally, 2025 IT spending trends reflect regional priorities - and also a shared commitment to a digital-first future. Whether it's investing in generative artificial intelligence in North America or expanding e-commerce platforms in Asia, it's a year that will continue to redefine how we innovate, collaborate, and work.

Read on to learn more about global IT spending trends for 2025, what tech will look like for regions worldwide, and the biggest investments for organizations as they look toward the future. In particular, we'll dig into these industry segments:

• Security and compliance
• AI and automation
• Cloud infrastructure and hybrid work solutions
• Data analytics and BI
• Customer experience
• Digital transformation
• IT workforce and skills development

Let's get started

Worldwide IT/tech investments in 2025: An overview

Worldwide IT spending is expected to grow in 2025. Gartner experts forecast IT spending will reach $5.74 trillion globally. That's an impressive 9.3% increase over 2024.

This growth is a significant rebound compared to the fluctuations that plagued the tech industry over the past four years. Rapid expansion was quickly met with waves of layoffs and reductions in 2022 and 2023. However, the recent growth trajectory and anticipated spike in 2025 reflect recovery and renewed confidence in tech to meet business challenges globally.

Tech spending forecasts, region-by-region

While global IT spending is rising, how will this growth look for each region? Here is an overview of the anticipated IT spending trends broken down by region:

Europe: Experts anticipate that IT spending across Europe will hit $1.28 trillion in 2025. This is an impressive 8.7% increase, the highest growth rate in a single year since the post-pandemic surge in 2021.

Middle East and North Africa (MENA): Gartner experts predict IT spending in the Middle East and North Africa will increase by 4.2%, reaching $175.5 billion in 2025.

Australia: Australia's IT spending is expected to surge 8.7% in 2025. Most of this growth in the continent is driven by AI, cybersecurity needs, and hardware upgrades as Windows 10 ends.

Latin America: Technology spending in Latin America is projected to grow between 7% and 9% in 2025. Digital transformation initiatives and increased investments in cloud computing will fuel much of the anticipated growth.

Southeast Asia: Southeast Asia is a standout subregion for 2025. Forrester forecasts a 7% rise in IT spending across five major Southeast Asian economies - Indonesia, Thailand, Vietnam, the Philippines, and Malaysia - to nearly $47 billion.

Trends, drivers & industry IT spending 2025

So, what is driving the growth in IT spend over the last year? Let's look at the specific areas where organizations will invest significantly in 2025:

Security and compliance

Cyber threats are not just growing. They're exploding: The average number of cyberattacks per organization per week reached 1,636, a staggering 30% increase year over year. Most of the rise in cyber threats is related to advances in AI, especially generative AI (GenAI) technologies. These technologies gave cybercriminals tools to increase their attack sophistication, including ransomware and phishing schemes.

In response to the acceleration of cybercrime, many public regulatory bodies have created stricter laws and regulations to protect their citizens. Some of the most notable recent developments include:

• Information Communications Technology and Services (ICTS) Rules. In 2024, ICTS regulations expanded. The Department of Commerce made changes to address national security risks, especially related to infrastructure as a service (IaaS). The changes will now allow the Department to review and potentially prohibit transactions from adversary countries, particularly those in connection with critical infrastructure, network infrastructure, data hosting and computer services that use or store sensitive personal data, and high-volume sales of IoT products like drones, webcams, and connected sensors.
• The European Cyber Resilience Act. The EU Council adopted the regulation on October 10, 2024, for all products containing digital elements. It aims to enhance security across connected devices in various member states.
• Cyber Security and Resilience Bill. The UK government announced the legislation in July 2024 to strengthen cyber defenses and protect critical infrastructure and services.
• Digital Operational Resilience Act (DORA). This EU law, which will take effect in January 2025, establishes uniform requirements for financial entities' network and information systems security.

See how Splunk can support DORA and other types of compliance, in FinServ and beyond.

These are just a few new initiatives demonstrating the global trend toward stringent cybersecurity regulations, which organizations must comply with to remain viable in 2025.In 2025, organizations worldwide plan to prioritize substantial investments in security and compliance to combat increasingly complex cyber threats and evolving regulatory landscapes. In fact, Gartner forecasts a 15% rise in cybersecurity spending for 2025.

Global expenditures are expected to reach $212 billion next year - with North America continuing to dominate cybersecurity spending. The continent spent $92.31 billion in 2024, and experts anticipate a CAGR of 8.51% over the next five years. Security services dominate the North American market, with experts projecting it to reach $50 billion in 2025. Globally, Gartner analysts expect cybersecurity to reach $86.07 billion.

More budget for cybersecurity. In fact, a 15% rise in cybersecurity spending is forecast for 2025. Global expenditures on information security are expected to reach $212 billion next year, but North America continues to dominate cybersecurity spending. The continent spent $92.31 billion in 2024, and experts anticipate a CAGR of 8.51% over the next five years. In particular, it's security services that dominate the North American market, a major subset of cybersecurity that includes areas like:

• Managed services
• Incident response
• Risk management

How dominant? Some are projecting it to reach $50 billion in spending in 2025 alone.

Training for compliance. While investing in cybersecurity products and services is critical for overall security, it doesn't stop there. Organizations are also increasing employee training and workforce development investments in 2025 to address growing technological demands and skill gaps.

An HCLTech Cyber Resilience Study found that 63% of organizations planned to increase their budgets for cybersecurity, including training, in 2025. (Research PDF available here.) With the rise in sophisticated cyber threats, organizations have focused on comprehensive employee training to help employees recognize and respond effectively to threats. Plus, many protection laws and industry-specific regulations require companies to train their staff in cybersecurity best practices to help maintain compliance.

Investing more in cybersecurity training in 2025 will ensure a vigilant workforce that can safeguard organizational assets and maintain regulatory compliance.

AI and Automation

2025 will see organizations moving past the hype of AI in order to focus on the practical implications and use cases the new technology can achieve. Gartner experts refer to this period as "the trough of disillusionment," the phase in the hype cycle where the initial overhype will give way to a more realistic understanding of the technology's potential.

However, that doesn't mean that AI will be stagnant: in fact, one estimate is that server sales will triple from 2023 to 2028 to make way for AI experimentation and innovation. Plus, Gartner experts expect IT software to increase 14% and IT services to experience 9.4% growth. In fact, experts at IDC project that global AI spending will surpass $200 billion in 2025.

New period of growth? In the next year, organizational projects will shift from cost-efficiency to growth as CIOs are being green-lit to spend more. John-David Lovelock, VP Analyst at Gartner, stated in a recent webinar:

"Growth is now the top thing on CEOs' minds."

Leaders will look to optimize their organizations with automation to push growth to the next level. In fact, the same Gartner webinar revealed that cloud emailing and authoring are expected to grow 23.4% in 2025.

Worldwide IT Spending Forecast (Millions of U.S. Dollars)
Source: Gartner, October 2024

	2024 Spending	2024 Growth (%)	2025 Spending	2025 Growth (%)
Data Center Systems	318,008	34.7	367,171	15.5
Devices	735,764	6.2	805,722	9.5
Software	1,087,800	11.7	1,239,779	14.0
IT Services	1,587,913	5.6	1,737,754	9.4
Communications Services	1,530,299	2.0	1,596,890	4.4
Overall IT	5,259,784	7.2	5,747,317	9.3

Focus on practical AI usage. Organizations are evolving past the initial hype of AI and focusing on its practical applications that align with their strategic objectives. With a more measured approach, investments will be made in leveraging AI and automation to enhance worker productivity and innovation and give each company a competitive advantage in the new business landscape.

(Related reading: AI ethics & the environmental impact of AI.)

Cloud infrastructure and hybrid work solutions

Although some large corporations have made headlines in recent months for their strong stance against working from home, most organizations have largely embraced a hybrid work schedule because of its many benefits for workers, customers, and businesses. (Hybrid work may look like a requirement for employees to be in-office 2-3 days a week; or, that teams can make the decision on whether in-person work helps get the job done.)

That explains why the number of employees working in hybrid or fully remote arrangements grew from 15% in 2023 to 38% in 2024.

As a result, leaders are making significant IT investments to support more flexible work arrangements. Analysts at IDC report that global spending on cloud services will reach $1.3 trillion in 2025, showcasing the critical role of cloud infrastructure in supporting business operations in a changing work environment.

According to Forrester researchers, as cloud services adoption increases, 2025 will see enterprises increasingly leveraging IaaS to:

• Improve operational efficiency.
• Continuing to support innovation.

Gartner analysts found that IaaS investments grew fast in 2024, at a shocking 22.6%, and they expect this trend to continue in 2025.

This skyrocketing infrastructure growth reflects more than hybrid work solutions. Digital transformation is another critical factor fueling investments in cloud infrastructure spending in 2025.

Digital transformation continues. Organizations rely on AI, automation, and real-time analytics to meet changing market demands, so cloud-native technologies are essential to enable agility and scalability. That's why 75% of leaders surveyed said their organizations will fully integrate digital transformation initiatives by 2025. This trend highlights how organizations will leverage cloud platforms to accelerate innovation in 2025.

Cost efficiency and management. Cost efficiency is also a major driver of IT spending on cloud infrastructure. The pay-as-you-go cloud services model allows leaders to optimize expenditures and scale their resources based on demand.

Although the emphasis on cost optimization will decrease in 2025, it is still a consideration for many CIOs. One Gartner survey found that 67% of CIOs said cost optimization is a top priority for their IT budgets in 2025. Shifting from traditional on-premises systems to cloud-based solutions allows them to lower expenditures while increasing operational flexibility.

(Related reading: a how-to guide for managing cloud costs.)

Data analytics and business intelligence (BI)

Knowledge is power, and organizations increasingly leverage the knowledge at their fingertips to deliver better results while maintaining cost efficiency.

A global focus on data-driven decision-making will continue in 2025 as leaders increasingly rely on analytics and business intelligence (BI) tools to stay competitive and grow. Global spending on big data and business analytics is expected to increase at a compound annual growth rate (CAGR) of 14.9% from 2024 to 2030.

(Image source: Grand View Research)

Starbucks is a powerful example of companies leveraging data to drive success in 2025 and beyond. The organization uses AI insights from its loyalty program, Starbucks Rewards, to analyze customer preferences and purchasing habits. With this information, Starbucks delivers tailored recommendations, promotions, and even location-based offers, increasing sales and customer loyalty.

Incorporating analytics at this scale illustrates the value of BI tools for personalizing customer experiences and optimizing operations, a trend influencing IT spending across industries.

(Related reading: product analytics.)

Customer experience (CX) spending

Customer expectations continue to evolve in 2025, fueled by:

• Technological advancements
• Shifting societal values

Personalization. One of the most notable expectations is personalization. An Epsilon survey found that 80% of customers said they were more likely to purchase when the brand offered a personalized experience. In addition, a report from Segment revealed that 71% of consumers reported feeling frustrated when they felt the shopping experience was impersonal.

Still, it's important to understand that these are segments of customers who are purchasing across varied industries - buyers who favor personalization may apply more in areas like e-commerce while liking it less in other industries or areas of the buying journey, for example.

These shifts in consumer expectations will impact organizations' IT spend in 2025, encouraging them to increase their investments in digital transformation and customer experience (CX). A recent Forrester survey found that 40% of CX leaders are planning to boost their investments beyond inflation over the next year. Many of these investments will be directed toward technologies like:

• Personalized marketing platforms
• AI-powered chatbots
• Omnichannel communication tools

All with the goal of helping organizations offer a seamless and engaging customer experience.

AI for customer experience. Leaders are not new to the pressure to adopt the latest fad. However, many were forced to jump into AI in 2024 without the knowledge and experience to get more from it: 61% of experience and service leaders said they felt pressure from executives to use AI immediately, even if they didn't know how to use it best.

As a result of this gap between adoption and knowledge, many organizations found that AI was not the solution to every problem and that simpler solutions were more effective and cost-efficient.

Plus, many customers were frustrated with the new technology and refused to use it: for example, one survey found that only 16% of consumers frequently use AI chatbots. Perhaps more surprising? More than a third (+33%) of consumers refuse to use them at all. Some of the most common complaints include:

• The slow response times
• Misunderstanding common language
• Challenges handling and building upon multiple questions

The complaints about AI chatbots highlight organizations' challenges in aligning their AI implementations to meet customer expectations.

Refocus on the customer, not the technology. To combat these challenges, many organizations will refocus in 2025 to ensure that customers, not technology, are the focus of IT spending. Experts anticipate CIOs will refine their AI strategies to:

• Enhance service delivery.
• Align with organizational goals.

This refinement requires a more discerning approach to technology adoption, to better ensure that AI implementations are purposeful and address real, specific business needs.

Digital transformation

In addition to the customer experience, digital transformation will remain a top priority for organizations in 2025, borne out by forecasts for global investments in this area to grow significantly.

Digital transformation spending will approach $4 trillion by 2027, with a CAGR of 16.2%. This trend underscores the business urgency of modernizing operations and enhancing agility in an increasingly competitive digital landscape.

Digital transformation in 2025 will be marked by a shift towards customer-centric applications to ensure technologies deliver measurable value. Just a few examples of the top innovations in 2025 are:

• Retail. Retailers increasingly deploy smart inventory systems and augmented reality (AR) for in-store experiences, blending the physical and digital worlds.
• Healthcare. Hospitals will invest in digital health platforms and AI-driven diagnostics, improving patient outcomes and operational efficiency.
• Manufacturing. Manufacturers will leverage predictive maintenance and supply chain analytics for real-time insights.

Organizations will refine their digital transformation and customer-centric experiences in the coming year to better align with their overall organizational goals.

IT workforce and skills development

An effective IT strategy involves more than just the tools organizations invest in; it also consists of the workforce behind the new technology.

Overall skills development. 2025 is expected to see a significant spend increase in the IT workforce and skills development area. The goal is to address evolving technological demands and maintain a competitive edge. In fact, about 90% of organizations now provide some form of digital learning, which leverages technology to offer flexible and accessible training solutions.

AI and ML skills growth. The rapid adoption of AI, machine learning, and cloud computing has created a significant demand for specialized skills in these areas. Companies like Amazon and Cognizant are ramping up investments in upskilling programs to improve their workforce skills.

• Amazon announced it plans to spend over $1.2 billion to upskill 300,000 workers by 2025 through offering university tuition, career coaching, and certifications.
• Likewise, Cognizant plans to train over 200,000 employees in digital skills by partnering with educational institutions and companies like Google.

(Image source: Zero to Mastery.)

Jobs and roles with significant growth. In addition to training, organizations will be looking to hire more IT experts in 2025. Here are some job roles expected to be in high-demand:

• A 33% growth in information security (InfoSec) analyst roles, reflecting the growing need for cyber security.
• Software developer roles are projected to grow by 17% in 2025, driven by the need for new applications and software solutions.

While the past few years have seen the job market fluctuate, the IT job market in 2025 is expected to be robust, with significant growth across various roles and specialties.

(Related reading & listening: best practices for recruiting top tech talent.)

 

Cybersecurity roles remain critical. Organizations are especially looking for professionals in emerging technologies and cybersecurity, underscoring how important continuous skill development is in this field. However, many leaders are struggling to find the talent they need: recently, 57% of tech leaders think hiring IT talent is challenging, particularly due to the current and ongoing skills gap.

Tech staff that take the time to improve their skillset will likely see an increased demand for their expertise in 2025.

What's next? Creating a practical, new future in 2025

The IT spending landscape in 2025 will be marked by a more realistic and balanced approach to tech. The focus will be on:

• Delivering actionable insights.
• Solving the problems customers want solved.
• Taking practical steps with the software and tools that organizations invest in.

Growth around generative AI, software, and data centers will continue to skyrocket next year, but leaders will better understand what they can - and cannot - accomplish. As organizations navigate changing economic conditions, IT spending remain critical for gaining a competitive edge and continuing growth.

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