COVID-19 pandemic will drive down worldwide IT spending by 5.1% in 2020

The COVD-19 pandemic is driving down tech spending and business investments, according to the latest figures from IDC. The research firm issued an update to its worldwide IT spending forecast that projects a 5.1% decline in 2020. However, IT infrastructure spending is still expected to grow overall by almost 4% to $237 billion driven by enterprise demand for cloud services. 

Infrastructure spending is still expected to grow slightly as businesses continue to fund existing cloud deployments. According to IDC, spending on cloud deployments will also be used by enterprises as a means to control costs and defer capital spending on upgrades to on-premise datacenters and applications.

The largest spending cuts will be on devices including PCs and smartphones, according to IDC. The PC market was already expected to decline this year. Telecom spending will decline by almost 1%, which is relatively stable compared to other types of technology investments.

IT services spending will also decline, mostly due to delays in large projects. However, IDC expects that services revenue that relates to the management, support, and operations of technology will be largely protected, as will spending digital transformation projects.

“Inevitably a major economic recession, in Q2 especially, will translate into some big short-term reductions in IT spending by those companies and industries that are directly impacted,” said Stephen Minton, program VP in IDC’s Customer Insights and Analysis group. “Some firms will cut capital spending and others will either delay new projects or seek to cut costs in other ways. But there are also signs that some parts of the IT market may be more resilient to this economic crash in relative terms than previous recessions with technology now more integral to business operations and continuity than at any time in history.”

Article source: https://www.zdnet.com/article/covid-19-pandemic-will-drive-down-worldwide-it-spending-by-5-1-in-2020/#ftag=RSSbaffb68