Global IT spending is on course to decline by more than 7% this year, but the technology services industry will recover far more quickly than others, according to research firm Gartner.
That’s largely because the coronavirus pandemic is stoking demand for digital tools and services, forcing many businesses to look out for options to ride through the storm.
“From movie theaters to banks, COVID-19 is forcing all organizations to get creative and stay afloat…. CIOs with less immediate cash on hand should plan on becoming more digital than they had originally anticipated at the start of 2020…. Enterprises cannot return to previous processes that are now rendered outdated due to the disruption of their primary revenue stream during the pandemic.” says John-David Lovelock, Vice President at Gartner.
Remote-working has caused a spike in device buying, but the research firm describes it as ‘temporary’, adding that spending on devices will ultimately slow down.
As businesses run short of money, they will likely direct their financial resources to subscription products and cloud services, which are available at lower upfront costs.
As in every recession, demand for services will only grow in the months to come. Infrastructure-as-a-service (IaaS) is expected to grow 13.4% to US$50.4 billion this year and 27.6% to $64.3 billion in 2021.
“Ongoing workplace collaboration requirements will fuel sustained end-user spending in cloud-based conferencing, which is projected to increase 46.7% in 2020,” the report added.