Worldwide IT spending is projected to total $3.4 trillion in 2020, a decline of 8% from 2019, according to the latest forecast by Gartner, Inc.
The havoc caused by the COVID-19 pandemic is causing CIOs to prioritize spending on technology and services that are deemed “mission-critical” over initiatives aimed at growth or transformation.
All segments will experience a decline in 2020.
Australian Tech spending to decline
In Australia, technology spending is forecast to decline by 6 per cent to just under A$88.8 billion in 2020, with the biggest falls in devices (PCs, tablets, smartphones) and data centre technologies.
The data centre budget is set to decline by 12.8%, while investment in new devices is expected to fall by 14.8%.
Gartner forecasts IT Services will decline 4.8%.
Australia IT Spending Forecast (Millions of Australian Dollars)
| 2019 | Growth | 2020 | Growth | |
| Data Centre | 3,225 | 2.3% | 2,813 | -12.8% |
| Enterprise Software | 16,914 | 11.9% | 16,307 | -3.6% |
| Devices | 13,026 | -1.6% | 11,094 | -14.8% |
| IT Services | 34,393 | 5.1% | 32,732 | -4.8% |
| Communications Services | 26,861 | 0.6% | 25,852 | -3.8% |
| Overall IT | 94,418 | 3.8% | 88,799 | -6.0% |
BAU top priority, Cloud silver lining
Investments will be minimized and prioritized on BAU operations that keep the business running. Gartner forecasts this will be the top priority for most organizations through 2020.
However, as the COVID-19 pandemic continues to spur remote working, sub-segments such as public cloud services (which falls into multiple categories) will be a bright spot in the forecast, growing 19% in 2020.
Cloud-based telephony and messaging and cloud-based conferencing will also see high levels of spending growing 8.9% and 24.3%, respectively.
Slow Recovery
Recovery will not follow previous patterns
Gartner research VP John-David Lovelock says: the forces behind this recession will create both supply-side and demand-side shocks.
“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.”
