COVID-19 to send global IT spend tumbling - analyst

Devices and datacentre tech expected to be hardest-hit segments, according

Worldwide IT spending is expected to plummet nearly 10 per cent this year due to the coronavirus and its trailing recession, according to Gartner.

Global spend on IT is expected to be $3.4tn, representing an eight per cent year-on-year fall from 2019.

The analyst house stated that CIOs are choosing "mission-critical" technology projects to spend their money on as a result of the pandemic and the anticipated global economic recession, rather than digital transformation or growth projects.

"CIOs have moved into emergency cost optimisation which means that investments will be minimised and prioritised on operations that keep the business running, which will be the top priority for most organisations through 2020," said John-David Lovelock, research VP at Gartner.

"Recovery will not follow previous patterns as the forces behind this recession will create both supply side and demand side shocks as the public health, social and commercial restrictions begin to lessen."

Devices and datacentres will see the biggest drops in spending, though all segments will see a decline. However, public cloud services will see growth of up to 19 per cent due to the surge in remote working.

Cloud-based telephony and messaging cloud-based conferencing will also see high levels of expenditure at 8.9 per cent and 24.3 per cent, respectively.

"In 2020, some longer-term cloud-based transformational projects may be put on hiatus, but the overall cloud spending levels Gartner was projecting for 2023 and 2024 will now be showing up as early as 2022," said Lovelock.

"IT spending recovery will be slow through 2020, with the hardest-hit industries, such as entertainment, air transport and heavy industry, taking over three years to come back to 2019 IT spending levels.

"Recovery requires a change in mindset for most organisations. There is no bouncing back. There needs to be a reset focused on moving forward."