Global IT spending likely to drop 8% in 2020 due to Covid-19

San Francisco: Due to the Covid-19 induced global economic recession, worldwide IT spending is projected to total $3.4 trillion in 2020, a decline of 8 per cent from 2019, according to a forecast by Gartner on Wednesday.

In October 2019, months before the outbreak of Covid-19, Gartner predicted that global IT spending was expected to rebound in 2020 with forecast growth of 3.7 per cent, primarily due to enterprise software spending. But now the coronavirus pandemic and effects of the global economic recession are causing CIOs to prioritise spending on technology and services that are deemed 'mission-critical' over initiatives aimed at growth or transformation, Gartner said in its latest forecast.

"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," John-David Lovelock, Distinguished Research Vice President at Gartner, said in a statement.

"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." All segments are expected to experience a decline in 2020, with devices and data centre systems experiencing the largest drops in spending.

However, as the Covid-19 pandemic continues to spur remote working, sub segments such as public Cloud services (which falls into multiple categories) will be a bright spot in the forecast, growing 19 per cent in 2020. Cloud-based telephony and messaging and cloud-based conferencing will also see high levels of spending growing 8.9 per cent and 24.3 per cent, respectively, according to the forecast.

"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.