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At the beginning of January this year, Gartner was projects a 3-4% increase in global IT spending. All that has changed with COVID-19. Gartner now thinks that IT spending will shift gears and decline 8 percent by year end.
Analyst firm IDC has also shifted down their projection for IT spending in 2020 by 5.1 percent.
Stephen Minton, program vice president at IDC, said that “inevitably a major economic recession, in Q2 especially, will translate into some big short-term reductions in IT spending by those companies and industries that are directly impacted. Some firms will cut capital spending and others will either delay new projects or seek to cut costs in other ways.”
John-David Lovelock, vice president at Gartner, said that “CIOs have moved into emergency cost optimization which means that investments will be minimized and prioritized on operations that keep the business running, which will be the top priority for most organisations through 2020. Recovery will not follow previous patterns as the forces behind this recession will create both supply-side and demand-side shocks as the public health, social and commercial restrictions begin to lessen.”
The only bright spot is spending on the cloud. Minton said that “Where there is growth, most of it is in the cloud. Increasingly, even more data will be stored, managed, and increasingly also analyzed in the cloud.”