IT spending forecast to grow at 4% in 2020: IDC

IT spending — excluding smartphones — is forecast to grow at 4 percent in 2020 against 7 percent growth in 2019, according to the latest IDC report.
Dollar spending on technologySmartphone sales will recover on the back of a 5G-driven upgrade cycle in the second half of the year.

Total ICT spending, including IT spending in addition to telecom services (+1 percent) and new technologies such as IoT and robotics (+16 percent), will increase by 6 percent in 2020 to $5.2 trillion.

Software growth will decelerate slightly from last year’s 10 percent to less than 9 percent and IT services growth will dip from 4 percent to 3 percent, but most of the slowdown will be due to the PC market where the end of the recent buying cycle (partly driven by Windows 10 upgrades) will see PC sales decline by 6 percent this year compared to 7 percent growth in PC spending last year.

Much of this year’s growth is dependent on a positive smartphone cycle, but this is under threat from disruption caused by the Coronavirus crisis, said Stephen Minton, program vice president in IDC’s Customer Insights & Analysis group.

IDC said its current forecast is for broadly stable tech spending in 2020, but PC sales will be way down, while server / storage investments will not recover to the levels of growth seen in 2018.

Hyperscale service provider IT spending will recover to 9 percent growth this year, up from 3 percent in 2019.

Cloud infrastructure and digital services providers will continue to increase their IT budgets to meet strong end-user demand for cloud and digital services, which will continue to expand at a double-digit rate of growth as enterprise buyers are increasingly shift their IT budgets to the as-a-service model.

China was expected to post IT spending growth of 12 percent in 2020, up from 4 percent in 2019, as the U.S. trade deal and a stabilizing economy helped to drive a rebound, especially in smartphone sales. The Coronavirus looks likely to inhibit this growth.

The rest of the Asia/Pacific region is forecast to post 5 percent IT spending growth this year, the United States (+7 percent), and Western Europe (+3 percent).

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