A sharp decline of 7.3% is expected in 2020 in global technology spending due to the impact of the COVID-19 pandemic. It is estimated that the industry will recover next year in a faster way than the recovery rate of the international economy. This year, however, technology costs around the globe are estimated to reach 3.5 trillion dollars from 3.8 billion dollars in 2019. For 2021, however, the market is expected to grow by 4.3%, reaching the level of 3.7 trillion dollars.
From cinemas to banks, Covid-19 forces all businesses and organizations to become more creative and stay alive, even without offering a purely physical experience to the consumers. With this data, companies, although with less financial liquidity now, will be forced to become more digital than they originally predicted in early 2020, which will push technology spending to rise by 2021. All the above information comes from the research and advisory company, Gartner.
However, the picture that the company describes for the course of the expenses for the technology of the current year is ominous, as, for example, all the sub-sectors of the market are estimated to move downwards (Data Center Systems, Business Software, Devices, Services Informatics, and Telecommunications Services).
In the category of systems for Data Centers, the sign of expenses will be negative by 10.3% this year, with the market value reaching 188 billion dollars. For 2021, however, the relevant expenses will move upwards by 6.2%, slightly exceeding 200 billion dollars.
In the Business Software market, the reduction in expenses during the current year will be at about 5.7%, which in absolute terms is translated to 449 billion dollars. Next year, the market will return to a positive sign of 7.4% with its value reaching 483 billion dollars.
Expenditures for devices will follow a downward trajectory, which is estimated to decrease by 16.1% in 2020 and to go up by 2.4% in 2021. In absolute terms, the relevant expenditures will move to the levels of 597 billion dollars in 2020 and 611 billion dollars in 2021. «Remote work has caused a temporary increase in the device market as businesses implemented teleworking plans. However, spending on devices is not expected to return to 2019 levels soon», according to analysts.
The Gartner company estimates, spending on IT Services will fall by 6.8% in 2020, hovering at 969 billion dollars, while in 2021 the market will move up 5.5% to 1,023 trillion dollars.
Finally, spending on Telecommunications Services is estimated to fall by 3.3% this year, while it will increase by almost the same percentage (3%) in 2021. In absolute terms, this means spending 1.326 trillion dollars in 2020 and 1,366 trillion dollars in 2021.
It is worth mentioning that 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. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
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