Global IT Spending to Plunge by $210 billion in 2020 The economic fallout from the coronavirus pandemic is forcing businesses and organizations across the world to prioritise their spending on technology and IT services.
Many of them reset their budgets to finance only critical projects over initiatives aimed at transformation and growth, which triggered a significant drop in IT spending this year.
According to data presented by
BuyShares.co.uk, global IT spending is expected to plunge by almost $210bn in 2020, a 5.5% decrease year-over-year. Spending on IT Devices to Plunge by 13.4%, the Biggest Drop in 2020
Before the COVID-19 outbreak, the global IT spending was growing for four years in a row, revealed the Gartner data.
In 2015, companies and organizations worldwide spent over $3.3trn on IT technology and services.
In the next twelve months, this figure rose to almost $3.4trn and continued growing. In 2018, global IT spending jumped to over $3.7trn, nearly a 10% jump in three years.
The increasing trend continued in 2019, with global spending on IT technology and services rising by 2.7% year-over-year to over $3.8trn.
However, the COVID-19 crisis caused a significant cut, with the figure falling to around $3.6trn in 2020.
Statistics show that global spending on devices like PCs, tablets, mobile phones, or printers is expected to witness the most significant drop in 2020, falling by 13.4% to around $616bn.
IT services spending is forecast to hit $992bn, a 4.6% drop in a year.
Businesses and organizations are expected to spend $459bn on enterprise software, 3.7% less than in 2019. Data center systems follow with a 3.2% decrease in spending to $208bn in 2020.
The Gartner survey also revealed that communication services, as the market’s largest segment, are forecast to reach $1.3trn in revenue, a 2.9% drop year-over-year.
Although the Gartner data indicate global IT spending will grow by 4% to over $3.7trn in 2021, this value still represents a 1.6% drop compared to 2019 figures.
IT Spending in China to Grow 6.4%, Japan to Witness the Biggest Drop
The IDC data revealed the COVID-19 pandemic is projected to have different impacts on IT spending by region in 2020.
China is set to witness a 6.4% growth in IT spending, the most significant increase this year. Latin America ranked second with a 5.5% increase.
Statistics show that the United States’ IT spending is projected to grow by merely 0.2% in 2020 compared to the pre-COVID-19 forecast of 6.6% growth.
On the other hand, Japanese businesses and organizations are forecast to witness the most significant drop in IT spending in 2020, falling by 6.7% year-over-year.
The Middle East and Africa, and the Asia Pacific follow, with 3.6% and 1.4% drop, respectively.
Global markets rise on stimulus hopes; but avoid ‘buy everything’ mindset Global IT Spending to Plunge by $210 billion in 2020