Although Gartner initially anticipated growth in global IT spending this year, the analyst firm now expects a steep decline due to the effects of the Covid-19 pandemic.
In January, Gartner released its annual projection for global IT spending, predicting growth from $3.8 trillion in 2019 to $3.9 trillion this year. At the time, there were few known cases of Covid-19 outside the Chinese province of Wuhan.
However, circumstances have changed significantly since the original estimate was made. Now, Gartner expects an eight percent decline in overall global IT spend year-on-year, despite the fact that cloud revenue, for example, is still expected to grow.
Gartner believes Covid-19 dramatically changed the priorities of executives worldwide. Instead of growth, innovation and transformation, the C-Suite is now focused on enabling remote working, cutting costs wherever possible and spending only on “mission-critical” technology and services.
"CIOs have moved into emergency cost optimization which means that investments will be minimised and prioritised on operations that keep the business running, which will be the top priority for most organizations through 2020," said John-David Lovelock, Research Vice President at Gartner.
The firm's new projections see almost all segments of the IT industry suffering a decline as the year progresses. Device purchases and data centre technology sales are expected to be hit the hardest.
Public cloud services, cloud-based phone telephony and conferencing solutions, meanwhile, are all expected to grow.
"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," said Lovelock.
"Recovery requires a change in mindset for most organisations. There is no bouncing back. There needs to be a reset focused on moving forward."