The year 2022 did not promise to be rosy. The general economic recession and geopolitical upheavals in the world at the beginning of the year filled business forecasts with uncertainty.
However, the IT sector managed not only to stay afloat, but also to demonstrate optimism in the second half of the year, The Economic Times reports. It said that despite the hardships, IT companies managed to avoid debts. Therefore, they will become even more attractive for investors.
World IT industry stats for 2022: slowing growth and business transformation
According to Gartner’s latest data, worldwide IT spending growth is less than 1% over this year. This figure is even more noticeable compared to the rapid leap in 2021, when the costs increased by more than 10%. Nevertheless, next year acceleration of growth is expected again.
Worldwide IT spending dynamic (millions of USD)
IT spending growths
Statistics show that 25% of the companies’ IT spending went on people and services. On-premises software and SaaS accounted for 20 and 19 percent, respectively.
Worldwide IT spending 2022, by category
As for revenue, the IT services market in 2022 is expected to reach $1,114.00 billion, according to Statista. And the USA will generate the most revenues – 411.80 billion dollars.
At the same time, even the world’s largest players haven’t escaped the challenges of 2022. Revenue growth at the five tech giants — Alphabet, Amazon, Apple, Meta and Microsoft — slowed to about 10 percent in the third quarter, compared with 29 percent for all of 2021, the Financial Times reported, citing analysts.
Recession preparations have forced tech companies to focus on transformation and redirecting investments, according to the Tech Sector Earnings Report: Q2 2022. While reducing overall expenses, they increase spending on the latest hardware and cloud-based solutions. An additional measure was also the slowdown in hiring.
In general, the demand for technological solutions remains stable. And the number of deals in certain areas, for example, related to ML and artificial intelligence, is significantly increasing.
Israeli IT sector in 2022: investment indicators and main challenges
Global economic uncertainty and market cooling have affected the Israeli tech industry as well. In the first half of 2022, 10.4 billion dollars were invested in Israeli startups down from 13.2 billion in the same period of 2021, The Jerusalem Post citing the Start-Up Nation Policy Institute.
This led to a contradictory situation. On the one hand, the shortage of qualified staff in Israel has increased. And a record number of vacancies was posted in the spring 2022. On the other hand, as of November, tech companies experienced a wave of layoffs.
Given the more optimistic forecasts for 2023, we can expect a return to growth, and therefore a new leap in the demand for specialists.
The impact of the war in Ukraine on the global IT industry
Over the years, Ukraine has gained the reputation of the “Silicon Valley” of Eastern Europe and one of the key providers of outsourcing IT services in the world. According to Accelerance, 98% of 1,500 local development firms provide services to companies outside the country.
The Russian invasion of Ukraine strongly affected the world tech talent market. Thousands of Ukrainian techies were forced to leave their homes and become refugees, or to defend the state at the front line. Russia and Belarus, which previously were taken as viable providers, have now completely lost their appeal and are no longer considered as an outsourcing destination, the report shows.
At the year-end, it becomes clear that software development companies in the safer Western regions of Ukraine manage to continue their work. And many firms from the most affected Eastern regions moved offices to neighboring European countries. Therefore, Accelerance predicts that most Ukrainian providers will resume their activities next year.
The statistics are also optimistic. Opendatabot service shows that Ukrainian IT exports increased by 16% in 8 months of 2022.
The main IT trends of 2022 that will affect the industry next year.
Most popular programming skills
Top 5 most used programming languages 2022
Return to offices after the pandemic
85% of companies asked their employees to return to physical offices in the summer of 2022, according to the SWZD report. But this is not the best solution. Surveys show that 70% of devs want to work remotely. And 33% of those who were asked to return to the office are not satisfied with that. The lack of remote options is one of the main reasons to leave the company. Read more about this in the article “The Main Problem to Hire the Right Dev For a Long Term“.
How do developers feel about going back to the office?
Improving the world as a key trend of startups
Driven by global events, companies are increasingly focusing their efforts on improving the world, rather than making a quick superprofit.
As proof, you can see the list of Israeli startups that were selected among hundreds of applicants for participation in Google’s accelerator. They are the next stars of Israel’s IT sector, according to Geektime. Most of them are primarily aimed at helping people.
For example, Theranica has developed a wearable device to relieve migraine attacks, Geektime said. One Step is working on a computerized system to assist physical therapists in their work. Lexense aims to facilitate access to justice and make the legal system open to everyone. Masterschool is a network of technology career schools where students pay nothing until they find a job in IT.
How can PerceptionBox help your startup achieve the goals?
We are sure that your startup will also make the world a better place. Therefore, we use all our experience and resources to gather the most effective development team for you. Contact us and turn your idea into reality.