IT spending in Asia Pacific will dip 1.3% in 2020: IDC

IT spending in Asia Pacific excluding Japan will decline by 1.3 percent in 2020, IDC report indicated.
Dollar spending on technologyMajority of countries have revised their GDP estimate to either flat or negative growth for 2020 due to lesser economic activities across all industries.

“Cloud will be a major differentiator as Capex may be under pressure for some time, forcing enterprises to move faster on the Cloud,” said Avneesh Saxena, group vice president for Domain Research at IDC Asia Pacific

Some technologies that will benefit from COVID-19 epidemic include solutions that support work from home (WFH), increased demand for cloud for business continuity, automation to deal with reduced workforce, to name a few.

IDC’s latest COVID-19 Impact on IT Spending Survey indicates increasing challenges across enterprises due to decrease in employee productivity, difficulty in addressing business issues, cybersecurity and privacy.

“This has nudged enterprises sitting on fringes to rethink their digital strategy as they try to adapt to the new normal of social/physical distancing,” says Vinay Gupta, research director for IT Spending Guides, Customer Insights & Analysis at IDC Asia Pacific.

Spending on devices will decline at 5.5 percent for 2020.

Most enterprises have delayed activities within sectors such as transportation, manufacturing, personal and consumer services, as well as banking (lending), mostly to curb down infection rates.

This has resulted in a negative impact on their revenues leading to a drop of discretionary spends on non-essential projects. However, spends related to ensure work continuity such as remote working, collaboration, and security is expected to be resilient.

Spending on IT services will have least impact due to an increase in remote location operations.

Businesses are likely to put on hold new projects till market is stable, and focus is expected to shift towards initiatives leading to cost optimization, efficiency, and resiliency in operations. It is expected that service contracts would be extended to get maximum value out of IT assets and defer any new purchases.

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