The COVID-19 pandemic will lead to a worldwide IT spending decline of 8% compared to last year, according to Gartner. The research firm’s current global IT spending forecast is $3.4 trillion for 2020.
The main trend is that CIOs are reprioritizing and focusing on mission-critical technology and services at the expense of projects focused on growth and transformation. Gartner said.
“CIOs have moved into emergency cost optimization which means that investments will be minimized and prioritized on operations that keep the business running, which will be the top priority for most organizations through 2020,” John-David Lovelock, the distinguished research vice president at Gartner, said in a press release. “Recovery will not follow previous patterns as the forces behind this recession will create both supply side and demand side shocks as the public health, social and commercial restrictions begin to lessen.”
Global IT Spending Forecast
Figures provided by Gartner provide a fascinating picture of spending that is contracting as it shifts toward products and services that can better support fragmented and dispersed workforces. Of five IT categories studied, all but one (devices) grew in spending in 2019. All five categories are headed to losses this year: data center systems (-9.7%); enterprise software (-6.9%); devices (-15.5%); IT services (-7.7%) and communications services (-4.5%). In all, spending will shrink from $3,756,862 in 2019 to $$3,456,344 this year.
Lovelock says that the hardest hit industries – which include entertainment, air travel and heavy industry – will take three years to return to 2019 levels.
IDC also sees difficult days ahead. In March, the firm said that the hardware sector will be the most affected by IT spending cuts, with software and services also deeply impacted. A bit less than a month later, the company said that the pandemic will cause a 2.7% decline in IT spending in 2020. It expects declines of at least 5% in hospitality and tourism-heavy industries such as transportation and personal and consumer services.