Gartner has cut earlier forecasts for worldwide IT spending across the globe as thecontinues to spread.
In January, the research agency predicted that global spending on IT, including devices, data center equipment, cloud solutions, and enterprise software would rise from roughly $3.8 trillion in 2019 to $3.9 trillion in 2020.
However, this forecast did not anticipate the widespread disruption caused by COVID-19. At the time of writing, there are 4.2 million confirmed cases worldwide.
The coronavirus outbreak sent shockwaves through the global economy, which has caused lockdowns, travel bans, job losses, and outright business closures. The IT industry is just one of many sectors that have experienced losses -- and now the focus is less on growth and more on recovery.
According to Gartner, previous growth indicators -- including in device sales and cloud technology -- will not stop an 8% decline in overall spending in comparison to 2019.
CIOs are now focusing their resources on a very different enterprise landscape that has been quickly thrust into remote working, employees on furlough or cut, and empty offices. As a result, spending is being prioritized on "mission-critical" technology and services deemed key at simply keeping businesses as operational as possible, rather than being transformative or intended to promote corporate growth.
"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," said John-David Lovelock, Gartner research vice president.
Gartner now expects all IT segments to experience a decline over the course of this year, with device purchases and data center systems suffering the heaviest blow. However, the coronavirus pandemic has created a demand for some technologies, such as remote conferencing tools and public cloud offerings.
The agency expects public cloud services to grow by 19% in 2020, while cloud-based telephone and messaging spending will increase by 8.9%, and conference solutions will experience a growth boost of 24.3%.
"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," said Lovelock. "Recovery requires a change in mindset for most organizations. There is no bouncing back. There needs to be a reset focused on moving forward."
COVID-19 has sent the technology industry into disarray and it is not only supply chains that are affected. Technology vendors across the world, including Microsoft, Google, Facebook, and Dell, to name but a few, have canceled conferences and summits and turned to virtual alternatives in light of the threat to our health.
The research agency itself is not impervious to the disruption caused by COVID-19. In March, Gartner said that all of its in-person conferences would be scrapped or postponed up until August 2020.
Previous and related coverage
- Gartner nixes conferences through August, takes $158 million Q2 revenue hit
- Your manager, or 69% of what that person does, will be automated, says Gartner
- CFOs looking to make remote work, telecommuting more permanent following COVID-19, says Gartner survey
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