Global IT Spending to Decline in 2020 Due to Covid-19 Pandemic, Says Gartner

CIOReviewIndia Team | Friday, 15 May 2020, 09:40 IST

                                Global IT Spending to Decline in 2020 Due to Covid-19 Pandemic, Says Gartner

Gartner forecasts IT spending across the world to fall this year due to the coronavirus pandemic that has stalled business operations worldwide. The global IT spending is expected to total USD 3.4 trillion in 2020, with a decrease of 8 percent from 2019, says a recent report by Gartner.                 

Businesses are prioritizing their spending on mission-critical services over the services aimed at transformation. “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. 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,” said John-David Lovelock, distinguished research vice president at Gartner.                                                                  

Among all the segments that will experience a decline, devices and data centre systems is expected to witness a massive fall in spending, as per the report. However, with a boost from remote working, the public cloud services segment is expected to witness increased spending. Cloud-based telephony & messaging and cloud-based conferencing will see an increase in spending by over 8.9 percent and 24.3 percent, respectively. “In 2020, some longer-term cloud-based transformational projects may be put on hiatus, but the overall cloud spending levels Gartner was projecting for 2023 and 2024 will now be showing up as early as 2022,” said Mr. Lovelock.                          

The recovery of IT spending will be slow throughout the year as some of the severely affected industries such as entertainment, airlines, heavy industries take over three years to reach the normal spending levels of 2019. The pandemic has led business leaders to move into emergency cost optimisation, resulting in minimised operations and prioritised spending to keep businesses running. “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,” said Lovelock.