An American research company has forecasted a deterioration in global IT spending this year amid the coronavirus pandemic.
Gartner, the US research firm, predicts worldwide expenditure on IT in 2020 will total $3.5 trillion, a 7.3% year-on-year decline, as businesses look to reduce their outlay in response to Covid-19.
No single area of the sector is set to be spared from the downturn. Data centre systems are due to experience a 10.3% drop, while IT services, enterprise software and communications services are due to fall by 6.8%, 5.7% and 3.3% respectively.
Despite an initial surge in demand caused by the increase in home working enforced by lockdowns worldwide, spending on devices is predicted to be the most heavily impacted area, with an anticipated 16.1% decrease.
Gartner’s research vice-president, John-David Lovelock, said, despite these grim figures, IT will still recover more quickly and smoothly than the rest of the economy. However, he called on firms to adapt amid the global health crisis, saying: “From movie theatres to banks, Covid-19 is forcing all organisations to get creative and stay afloat without exclusively offering physical experiences. Specifically, CIOs with less immediate cash on hand should plan on becoming more digital than they had originally anticipated at the start of 2020.”
Gartner believes the world economy is now entering a “recovery” phase, meaning there will be a backlog of IT projects to deal with, but less capital to finance them. Therefore, CIOs are set to refocus spending towards subscription products and cloud services to minimise expenditure, with cloud-based conferencing set to boom by 46.7% as a result.
Mr Lovelock predicted that many companies will soon return to an increased level of “revenue certainty”, allowing the IT sector to bounce back. He added: “This pause and restart will push growth out of 2020 and into 2021 … [but] the smooth ‘swoop’ recovery of top line IT spending masks a very turbulent recovery across some countries, industries and markets.”