The latest report from IDC offers an industry-level assessment of how coronavirus (COVID-19) will affect IT spending in 2020
According to the International Data Corporation (IDC) report “Worldwide ICT Spending Guide: Industry and Company Size, IT spending globally is set to decline 2.7% owing to the economic impact of the COVID-19 pandemic. Almost all industries will be affected by the global slowdown, while a few will reduce their IT spending more than others.
The healthcare and telecommunications segments are expected to increase IT spending as they respond to new demands generated by the coronavirus pandemic.
IT spending is expected to witness more than a 5% fall in the hospitality and tourism industries, including transportation and personal and consumer services. In 2020, discrete and process manufacturing will face significant risks due to which the spending is expected to fall by more than 3%.
As per the report, industries that have been affected the most due to the pandemic will have to reduce their workforce and invest less in technology, as compared to those that we’re able to somewhat sustain their business operations in the crisis.
The report predicts that the hardware sector will see the largest decline as IT spending is predicted to fall by more than 5%. This will happen mostly because several companies will not invest in near-term infrastructure. IDC predicts that IT and business services will witness a decrease in spending as companies focus on running their existing operations and critical projects. Software spending is expected to perform better and record an increase of 2%, which will be led by purchases of collaborative applications and content workflow and management applications.
Large and very large businesses (those with more than 500, and more than 1,000 employees) represent a much larger market opportunity. However, this year both these segments are expected to see a decrease in IT spending by over 1%, representing a drop of $17 billion.
It is important for technology suppliers to reevaluate and refocus their efforts toward the more resilient segments to mitigate risk and reduce the economic impact of exposure to the economic slowdown.