IT spending to drop 5.1% to $2.25 trillion in 2020: IDC

The worldwide IT spending is expected to drop 5.1 percent in constant currency terms to $2.25 trillion in 2020, as COVD-19 pandemic will drive down tech spending and business investments.
Dollar spending on technologyICT spending, which includes telecom and business services, will dip 3.4 percent to just over $4 trillion with telecom spending down 0.8 percent, IDC report said.

IT infrastructure spending is projected to grow overall by almost 4 percent to $237 billion with resilient spending by service providers in addition to enterprise demand for cloud services offsetting declines in business capital spending.

Some firms will cut capital spending and others will either delay new projects or seek to cut costs in other ways, Stephen Minton, program vice president in IDC’s Customer Insights & Analysis group, said.

Overall spending on devices including PCs and phones will be down significantly this year and is the main drag on total IT spending with the economic fallout likely to disrupt upgrade cycles for smartphones, which were expected to be boosted by the launch of premium 5G devices.

The PC market was already expected to decline this year after a commercial refresh cycle in 2019, leaving discretionary upgrades to new notebooks and tablets extremely vulnerable to any period of economic decline.

Infrastructure spending is expected to post moderate growth overall as businesses continue to fund existing cloud deployments while some may even look to accelerate their cloud projects during the remainder of the year as a means to control costs and defer capital spending on upgrades to on-premise datacenters and applications.

Software spending is expected to decline as businesses delay new projects and application roll-outs, while there is a fundamental link between employment and spending on things like software licenses and campus networks.

IT services spending will decline mostly due to delays in big new projects, but a large portion of services revenue will be relatively protected from spending cuts where it relates to the management, support, and operations of technology, which is now fundamental to business performance and viability.

“We expect to find that early adopters of cloud and other digital technologies were best positioned to ride out this kind of storm with the least amount of disruption from an operational perspective, even if the direct impact on revenue is still more affected by external factors that no CEO or CIO saw coming,” Stephen Minton said.

Telecom spending will decline by almost 1 percent, which is relatively stable compared to other types of technology investments.

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