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Denys Rudyi - Fotolia

Denys Rudyi - Fotolia

News Stay informed about the latest enterprise technology news and product
updates.


IT SPENDING NOW EXPECTED TO DECLINE 5.1% IN FACE OF PANDEMIC

 * 
 * 




SPENDING ON PCS AND MOBILE DEVICES IN 2020 IS EXPECTED TO TAKE THE BIGGEST HIT,
ACCORDING TO ANALYST FIRM IDC -- BUT SPENDING ON IT INFRASTRUCTURE WILL RISE.

Share this item with your network:

 * 
 * 
 * 


By
 * Taylor Driscoll, Editorial Assistant

Published: 14 May 2020

IDC recently further revised its worldwide IT spending forecast for 2020, from
an earlier projection of a 2.7% decrease in constant currency to a 5.1% decrease
due to the COVID-19 pandemic. In February, IDC had predicted a 5% increase in
worldwide IT spending.



Despite the drop to a projected $2.25 trillion in spending, IT infrastructure
spending is still expected to rise by almost 4%. Analysts see other reasons to
be optimistic.

"In the long term, this won't disrupt the general trend toward digital
transformation -- in fact, it might just accelerate it," said Stephen Minton,
program vice president of customer insights and analysis at IDC. "The crisis
will likely provide us with proof points which show that companies that were
further along the road with things like cloud adoption and digital
transformation in general were best positioned to withstand this kind of event."

Businesses also have to be careful about their business continuity plans and how
they proceed with making cuts and how they look at this unique situation in a
long-term lens.

"[Businesses] have to get a handle on [their spending and budgeting]. They need
to know where they are and they also need to know, assess and come up with
scenarios for where the potential for growth is, vs. contraction," said Howard
Dresner, founder and chief research officer at Dresner Advisory Services. "You
know where you should be investing, because if you can do across-the-board cuts,
you're cutting your growth business, too."


DOUBLE-DIGIT DECREASE IN DEVICE SPENDING

Devices will be hardest hit, with companies spending 12.4% less on PCs and
mobile devices in 2020. Companies were planning to reduce spending on PCs due to
last year's commercial refresh cycle, but mobile devices were expected to see a
boost with the impending launches of 5G service and products.

Minton said there is a chance that companies may spend more on devices, however,
given the rise in work-from-home initiatives due to shelter-in-place orders.

> Businesses have to evaluate which technologies can help them to not only keep
> operating during the period of social distancing, but also to come out of the
> crisis at something like full speed. Stephen MintonProgram vice president, IDC

"There could be some cuts in spending on mobile devices and apps, for example,
because people are not currently very mobile," Minton said. "On the other hand,
there's a lot of crossover between mobile and working from home, so it's not a
simple equation. Businesses have to evaluate which technologies can help them to
not only keep operating during the period of social distancing, but also to come
out of the crisis at something like full speed, so cutting too much can be just
as damaging as not cutting enough in some cases."


IT INFRASTRUCTURE SPENDING TO RISE

Although overall IT spending will decrease, infrastructure spending is expected
to increase 5.3% this year, mainly due to enterprise spending on
infrastructure-as-a-service projects.

"The most long-term impact is probably going to be that this will be a tipping
point for cloud, which sees a lot of the laggards finally embrace off-premise
public and hybrid cloud services, and begin to scale back or even close down
their own data centers and server rooms," Minton said.

This comes after a strong fourth quarter in 2019 that brought in $14.9 billion
in spending for cloud infrastructure, after two consecutive quarters of steady
decrease.


IT CONFERENCES AND EVENTS AFFECTING SPENDING

Although technology conferences worldwide have either been canceled out of
precaution for attendees, been postponed or gone digital, Minton said they won't
directly affect projected IT spending. The results of the upended conference
calendar may be seen down the line, however.

"It impacts the launch of new products and the general process of evaluating and
comparing new technologies," Minton said. "The lack of face-to-face contact in
general will have a chilling effect on things like new projects and buying
decisions."

A recent Gartner report, "Addressing Disruptions to Tradeshow and Event
Marketing Plans Due to Coronavirus (COVID-19)," contingency plans can help
minimize the effects that COVID-19 has had on tech events and conferences. The
report found that 11% of their marketing budget is pushed on third-party
tradeshows and Gartner recommends companies reallocate their budgets in case of
these cancellations.



DIG DEEPER ON IT SPENDING AND BUDGETING

 * CORONAVIRUS: DIGITAL BANK’S VALUATION FALLS AS IT SEEKS FUNDS TO RIDE
   COVID-19 STORM
   
   
   By: Karl Flinders

 * CORONAVIRUS: TOTAL OUTSOURCING SPENDING COLLAPSES IN MARCH
   
   
   By: Karl Flinders

 * IN COVID-19 ECONOMY, CX TEAMS SHRINK DESPITE GREATER NEED
   
   
   By: Don Fluckinger

 * CORONAVIRUS DECKS STORAGE AND SERVER ENTERPRISE SPENDING
   
   
   By: Garry Kranz

Sponsored News
 * Next Step in The Digital Workspace: Using Intelligence to Improve Data
   Delivery... –Citrix
 * How Leaders in Education Can Modernize IT to Reduce Complexity –DellEMC
 * Improve Datacentre Performance by Closing the Gaps in Memory and Storage ...
   –Intel
 * See More

Related Content
 * Coronavirus decks storage and server enterprise ... – SearchStorage
 * IDC cuts global IT spending expectations – MicroscopeUK
 * Global IT spending recovery won't fully bounce back ... – MicroscopeUK

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