IT spending by enterprises remains stable in Asia Pacific: IDC

Consumer IT spending in Asia Pacific will be declining in 2022 and a further slide is expected in 2023 due to the economic slowdown.
IT spending in Asia Pacific IDC report
A report from IDC said demand from enterprises and service providers for IT investments remains stable so far in Asia Pacific excluding Japan. Any further worsening of the financial situation will also impact enterprise and service providers’ spending.

“One in two businesses in the region expect that IT cost price increase stemming from inflation will impact their spending plans for the rest of 2022,” says Vinay Gupta, Research Director, IT Spending Guides, IDC Asia Pacific. “If the situation persists, businesses will either delay projects or adjust spends to focus on strategic initiatives essential for future business functions and needs.”

Countries like Singapore, South Korea, India, Thailand, and Taiwan, are net importers of energy and commodities and are witnessing higher inflation because of increasing prices.

Indonesia and Australia, which typically export coal, oil, gas, and other commodities, are benefiting from the current situation. Their inflation results from pent-up demand due to the economy’s opening up and supply chain constraints. The scenario reports a reduced IT spending growth of 7.2 percent against 8.6 percent reported in the June release of Black Book Live.

The situation in China is improving with lockdowns lifted and easing supply chain constraints. A strong recovery is expected in 2023 as government intervention will drive stability and growth.

Consumer IT spending (related to consumer purchase of mobiles, tablets, PCs, wearables, and peripherals) slowed in the first half of 2022 because many device purchases have already happened in the last two years to enable work from home or online classes.

Enterprise IT spending has been stable as businesses continue to protect IT budgets in the short term. Operational budgets account for a larger share of overall spending (cloud, subscription, as a service) and are difficult to pull back at short notice.

Some capital spending is vulnerable along with investments in new projects because the focus will shift to keeping the lights on rather than putting money on new initiatives. However, CIOs’ willingness and ability to increase IT budgets in line with rising prices is more uncertain today, IDC said.

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