Since the world went crazy in 2020 and the fact that we faced a world-wide pandemic,global tech spending dropped by 7.3% in 2020 and forecasts suggest 4.3.% growth in 2021 which is still down from 2019 levels (according to Gartner).
The World Economic Situation and Prospects as of mid-2020 report, published on 13 May stated that the UN’s Department of Economic and Social Affairs projected a 3.2% contraction for the global economy in 2020, and losses of “nearly $8.5 trillion in output over the next two years due to the COVID-19 pandemic, wiping out nearly all gains of the previous four years”. That’s a lot of bad news.
As a result of the pandemic there are many trends among enterprise IT.
Here are some insights:
- The crisis is likely to accelerate the shift towards digitalization and businesses that are further down the digital transformation path will fare better in coping with the crisis. Most notably, the ability to work remotely has become vital to ensure business continuity.
- Gartner expects that, as revenues decline and IT projects back up, CIOs “will gravitate toward spending on subscription products and cloud services to lower upfront costs”.
- Cloud-based conferencing will see a 46.7% increase in 2020
- Gartner forecasts 13.4% growth in IaaS (infrastructure as a service) to $50.4 billion in 2020 and 27.6% growth to $64.3 billion in 2021.
Overall, the analyst firm seems cautiously optimistic about IT spending in 2020/21, expecting recovery to outpace that of the overall economy. In the graphic below you can the list of priorities among CEOs and how they changed from Q4 of 2019 to Q2 of 2020.
It’s not yet clear how the global pandemic, and the recession it has caused, will play out over the next 12 months: will further outbreaks and lockdowns happen, or will treatments and vaccines usher in more optimistic scenarios? However, digital transformation has made companies more agile and flexible, and the current crisis is likely to accelerate that trend. As a result, if another pandemic comes along, or the current one gets worse, organizations should be even better placed to respond.
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