Global IT spending to decline by 8% due to COVID-19 — Gartner

Global spending on IT is projected by Gartner to reach $3.4 trillion in 2020, spelling an 8% decline from 2019, with CIOs appearing to prioritise mission-critical tech and services over growth or transformation initiatives.

All areas of IT are set to see a decline, with Gartner expecting spending on devices to see the largest dip (-15.5%).

Data centre systems are set to see a 9.7% decline, while spending on IT services, enterprise software and communications services are projected to be down by 7.7%, 6.9% and 4.5% respectively.

Devices and communications services were also forecast by Gartner to see downturns in 2019, while all other segments were projected to see growth.

“CIOs have moved into emergency cost optimisation, which means that investments will be minimised and prioritised on operations that keep the business running, which will be the top priority for most organisations through 2020,” said John-David Lovelock, chief forecaster at Gartner.

“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.

“IT spending recovery will be slow through 2020, with the hardest hit industries, such as entertainment, air transport and heavy industry, taking over three years to come back to 2019 IT spending levels.

“Recovery requires a change in mindset for most organisations. There is no bouncing back. There needs to be a reset focused on moving forward.”

How can businesses manage technology costs during the Covid-19 crisis?

Henrik Nilsson, vice president EMEA at Apptio, explores how businesses can manage their technology costs during the Covid-19 crisis. Read here

Growth in cloud

However, cloud technology, which falls into multiple segments, has been projected to be a bright spot in an otherwise bleak outlook for IT spending, with Gartner forecasting 19% growth in 2020.

More specifically, spending on cloud-based telephony and messaging has gauged a envisaged growth figure of 8.9%, while cloud-based conferencing has been projected to see spending rise by 24.3%.

This has mainly been attributed to the rise in remote working that has occurred as a result of the COVID-19 pandemic, with organisations finding that the cloud eases the process of continued collaboration under the circumstances.

“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 Lovelock.


Avatar photo

Aaron Hurst

Aaron Hurst is Information Age's senior reporter, providing news and features around the hottest trends across the tech industry.

Related Topics

IT Spending