The item of reducing the cost of emergency response is now ranked first in the list of IT spending items in the budgets of companies and institutions around the world, instead of spending on investment and new expansions, in response to the signs of the economic recession resulting from the Corona epidemic. To reduce the estimates for the total expected global spending on information technology during the current year, to become about $ 3.4 trillion, a decrease of 8% from the rate of spending last year.

This came in the latest report issued by the «Gartner» International Foundation for Research and Consulting the Information Technology Market, on the expected global spending on information technology during the year 2020. The deputy head of research at Gartner, John David Lovelock, said in a summary of the report published on the newsroom on the site The official foundation of the institution, "Gartner" reduced its previous forecast issued last January, on the total expected spending on information technology, to become about $ 3.4 trillion, a decrease of 8% over spending rates in 2019, after its expectations that global spending on information technology will reach 3.9 Trillions of dollars in 2020, up Of 3.4% on 2019.

The cost of the emergency effects

Lovelock attributed this change in expectations to the fact that the IT managers in various institutions and companies around the world have already moved to focus on mitigating the cost of the effects of the emergency, and everything that guarantees the continuation of operations and business management, as this will have priority over what is included, including new investments. In hardware, software and projects, indicating that this pattern of spending will continue until at least the end of this year.

Video and cloud services

The «Gartner» report indicated that the expected decline in spending will include all technology works, with the exception of only two areas: cloud computing services, which spending is expected to grow by 19%, and the field of telephone communications, messages and conferences based on the cloud as well, where spending on communications will increase Telephone messaging increased by 8.95%, and video conferencing by 24.3%, as this would be driven by a focus on remote work mode.

As for data center systems, spending on them will reach 122 billion and 191 million dollars in 2020, to achieve a decline of 9.7% from 2019, while spending on new projects and programs will reach 255 billion and 426 million dollars, to achieve a 6.9% decrease from 2019, while The spending on devices is 879 billion and 589 million dollars, to achieve a decrease of 15.5% for 2019, while IT services spending will reach 461 billion and 952 million dollars, recording a decrease of 7.7% from 2019.

Slow recovery

According to the report, the declines will not be followed by any type of rapid recovery, because the forces behind this decline will lead to shocks, and disturbances on both the supply and demand sides, as the health, social and commercial constraints of the epidemic began to shrink. In this context, Lovelock said, "Recovering from declining spending on information technology will be slow, as the most affected industries, such as entertainment, air transport and heavy industries, will need more than three years to return to the levels of spending that were prevalent in 2019, as these require Return is a change in the way of thinking of most institutions. ”

Other estimates

And Gartner issued other previous estimates this month about spending expectations, including an opinion poll attended by 161 financial executives, during which 24% of them expected that spending on robotic operations automation systems known as "RPA" would rise, while 30 said % Expect more spending on cloud-based ERP systems and technologies, while 19% expected spending on advanced analytics systems to rise, and they said that expectations for higher spending in these systems are due to companies now operating in remote environments with fewer Employees, to operate major operations and transfers The enormous cost pressure, which led to the companies move quickly to a larger cloud, and apply more «robots» on its operations, and revealed the need for advanced analytical techniques, to plan effectively in this environment.

consequences

The works of the first quarter of this year, at some major technology companies, showed results that support Gartner’s analysis of spending, most notably the revenue of Cisco, the largest provider of equipment, operation and maintenance of information networks in the world, by 8%, during The first quarter of 2020.

The company said, in a statement announcing the results of its business, that it expects an additional decrease, ranging between 8.5 and 11.5%, in the revenues of the second quarter of this year.