A new report published by Stamford-based Gartner Inc. is projecting an 8% year-over-year decline in global IT spending as a result of the economic tumult created by the COVID-19 pandemic.
This year’s projected total of $3.4 trillion, down from last year’s $3.7 trillion, is the result of companies prioritizing their high-tech budgets on critical services designed to keep businesses running, rather than initiatives aimed at growth or transformation.
All segments of IT spending are forecast to decline this year, with the greatest cuts related to investments in devices and data center systems. However, Gartner also forecast a rise in the cloud computing subsegment, with year-over-year increases in public cloud services (19%), cloud-based conferencing (24.3%) and cloud-based telephony and messaging (8.9%).
“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 John-David Lovelock, distinguished research vice president at Gartner.
“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 organizations. There is no bouncing back. There needs to be a reset focused on moving forward.”