The economic fallout of the coronavirus pandemic means global IT spending is projected to slump by 7.3% compared with 2019, according to research firm Gartner.

For 2020, worldwide IT spend is forecasted to total $3.5tn. However, Gartner analysts believe spending on IT projects will recover at a faster rate than the rest of the economy.

The decline comes as businesses are more dependant on ever on technology to continue working remotely. However, many organisations have seen their revenues take a hit during the pandemic and have reigned in overall spending in the face of business uncertainty. Back in January and pre-pandemic, Gartner had forecasted IT spending in 2020 to total $3.9tn.

Spending on devices was the worst hit segment with a decline from $711.525bn in 2019 compared to $596.914bn projected for 2010 – a 16.1% decline. According to Gartner, working from home caused a temporary spike in device spend but that activity is expected to slump for the remainder of the year.

Spending on communications services, which includes services offered by the likes of IBM, Ericsson and Wipro, are the least affected. IT spend on this segment stood at $1.372tn in 2019 and is projected to fall to $1.326tn this year – a 3.3% decline.

Despite slump in global IT spending for 2020, 2021 looks promising

Despite the fall in IT spending in 2020, Gartner anticipates growth to pick up to 4.3% in 2021.

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By GlobalData

“Overall IT spending is still expected to sharply decline in 2020 but will recover in a faster and smoother manner than the economy,” said John-David Lovelock, distinguished research vice president at Gartner. “Still, organisations cannot return to previous processes that are now rendered outdated due to the disruption of their primary revenue stream during the pandemic.”

According to Gartner’s Q2 2020 Worldwide IT Spending report, CIOs will turn to cloud subscription services as they look to work through their IT backlog because of their lower upfront costs.

“From movie theatres to banks, Covid-19 is forcing all organisations to get creative and stay afloat without exclusively offering physical experiences,” added Lovelock. “Specifically, CIOs with less immediate cash on hand should plan on becoming more digital than they had originally anticipated at the start of 2020.”

Not everyone anticipates IT spending to take a hit this year. According to analytics firm GlobalData – Verdict’s parent company – some 50% of firms are increasing their IT budgets in response to the coronavirus pandemic. The company said that the virus has accelerated the rate at which organisations embrace technology into their workforce.

Read more: UK tech startups buck coronavirus slump, with funding nearing 2019 levels