Tech spending in Australia is forecast to decline 6 per cent to just under A$88.8 billion in 2020, with the biggest falls in devices (PCs, tablets, smartphones) and data centre technologies, according to Gartner.

Worldwide IT spending is projected to total $3.4 trillion in 2020, a decline of 8 per cent from 2019, according to the latest forecast.

The coronavirus pandemic and effects of the global economic recession are causing CIOs to prioritise spending on technology and services that are deemed “mission-critical” over initiatives aimed at growth or transformation.

Source: Gartner.

“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, research VP 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.”

All segments will experience a decline in 2020, with devices and data centre systems experiencing the largest drops in spending (see Table 1).

But 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 per cent in 2020.

Cloud-based telephony and messaging and cloud-based conferencing will also see high levels of spending growing 8.9 per cent and 24.3 per cent, 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,” said 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,” he said.

“Recovery requires a change in mindset for most organisations. There is no bouncing back. There needs to be a reset focused on moving forward.”

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