The coronavirus crisis is impacting IT markets as buyers and vendors adjust to a new set of assumptions.
There will be a significant slowdown in spending on hardware in particular during the first half of 2020 with software and services spending also affected as the crisis reverberates through all sectors of the economy, including supply chains, trade, and business planning, according to IDC.
By the end of 2020, in a pessimistic scenario, IT spending could grow by 1 percent compared to the original forecast of more than 4 percent growth, and these forecasts are more likely to trend down than up in the next few weeks.
According to the IDC Worldwide Black Book Live Edition for February 2020, IT spending is projected to grow by 4.3 percent this year, reflecting downward adjustments to forecasts for hardware device sales. This is down from the 5 percent forecast in January, and IDC expects the March Black Book to show an additional downgrade to these forecasts based on the latest indicators and survey data.
IT spending was originally forecast to grow by just over 5 percent this year, as strong PC sales in the fourth quarter of 2019 gave way to a smartphone upgrade cycle driven by 5G and a recovery for service provider spending on infrastructure, while momentum around digital transformation projects continued to ensure strong demand for software and IT services.
The February Black Book downgraded growth to 4.3 percent and this is likely to drop closer to 3 percent in March based on the latest forecast adjustments and scenarios. In a pessimistic scenario, based on the crisis extending beyond Q2 outside China, the worldwide IT market is more likely to grow by around 1 percent, IDC said.
