GlobalData surveyed over 4,000 IT buyers across the world to better understand how Covid-19 is expected to impact technology purchases. As expected, a large number of buyers noted that their organizations will cut IT budgets in 2020 because of the virus.
Over 55% of buyers noted they will reduce spending, with 21% indicating declines of over 20%. However, a substantial portion revealed that spending will remain relatively unchanged, and an encouraging 20% even indicated spending increases.
Some 15% of buyers indicated that spending will grow 5%; and 5% of respondents stated that spending will jump by roughly 10%. Interestingly, findings are remarkably consistent across geographic regions.
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Although infectious disease experts had warned of the potential of a pandemic for years, Covid-19 took most organizations by surprise.
The majority of large enterprises had extensive business continuity and resiliency plans in place, but most were still scrambling to keep employees securely connected when governments mandated that all but the most essential workers stay home.
This sudden change in normal business operations, combined with the economic impact of the global lockdown, has (not surprisingly) influenced IT spending plans for the remainder of the year, and most likely into 2021.
New IT technologies are likely to be the winners with buyers
So where are most respondents expecting to make budget cuts and where are the bright spots? Application development and management, business process applications, business process outsourcing, and consulting will likely be the hardest hit. Between 30% and 50% of buyers noted spending declines in these areas. But on a more positive note, communication and collaboration, cloud services, security, networking, and mobility spending will be more resilient. At least 30% of respondents expect spending increases for these technologies.
Looking ahead, as work-from-home transitions to work- from-anywhere, demand for these solutions will likely remain strong and continue to evolve as organizations adjust to a new normal.
Similarly, demand for digital transformation solutions, such as automation, analytics and artificial intelligence (AI), augmented reality/virtual reality (AR/VR), edge computing, and blockchain will recover as companies look to optimize costs, improve efficiency, monitor supply chains and the origins of products, and enhance remote experiences.
It is clear that Covid-19 will have a profound and long-lasting impact on the technology world.