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Gartner: Local IT spending to dip 6% in 2020

14 May 2020

According to a recent Gartner report, tech spending in Australia is forecast to decline by 6% year-over-year in 2020, around AU$8.8 billion, 2 percentage points less than the global IT spending decline. 

The research and advisory firm’s global IT spending forecast update represents the current view of how governments’ actions to combat COVID-19 are impacting spending on technology products and services globally.

“CIOs have moved into emergency cost optimisation which means that investments will be minimised and prioritised on operations that keep the business running, which will be the top priority for most organisations through 2020,” said John-David Lovelock, distinguished research vice president at Gartner. 

“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.”

Worldwide IT spending is projected to total $3.4 trillion in 2020, a decline of 8% from 2019.

All segments will experience a decline in 2020, with devices and data centre systems experiencing the largest drops in spending.

However, as the COVID-19 pandemic continues to spur remote working, sub-segments such as public cloud services (which falls into multiple categories) will be a bright spot in the forecast, growing 19% in 2020. 

Cloud-based telephony and messaging and cloud-based conferencing will also see high levels of spending growing 8.9% and 24.3%, respectively.

“In 2020, some longer-term cloud-based transformational projects may be put on hiatus, but the overall cloud spending levels Gartner was projecting for 2023 and 2024 will now be showing up as early as 2022,” adds Lovelock.

“IT spending recovery will be slow through 2020, with the hardest-hit industries, such as entertainment, air transport and heavy industry, taking over three years to come back to 2019 IT spending levels. Recovery requires a change in mindset for most organisations. There is no bouncing back. There needs to be a reset focused on moving forward.”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. 

It uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The quarterly IT spending forecast delivers a perspective on IT spending across the hardware, software, IT services and telecommunications segments.

Gartner has created a collection of complimentary research and webinars to help organisations respond, manage and prepare for the spread and global impact of COVID-19.