Spending is down in most departments across most industries, including the IT department, according to new research on technology budgets.That’s not good news for AV integrators, but there will still be robust opportunities to sell technology to some sectors and organizations.
According to International Data Corp. (IDC), worldwide IT spending is expected to decline 2.7% this year due to the economic impact of the COVID-19 pandemic.
While some industries – like hospitality and tourism, for example – are more affected by others, every industry will be affected by the global slowdown, according to IDC’s research.
Unsurprisingly, hospitality and tourism and adjacent industries like transportation and personal and consumer services will be impacted the most due to federal guidelines and recommendations around social distancing and travel. Spends in those markets will decline by at least 5%.
Small businesses will see the largest decline in spending with reductions of 4.9% for small offices with less than 10 employees and 2.7% for businesses with up to 99 employees.
Read Next: Worldwide IoT Spending to Hit $1 Trillion by 2020, Says IDC
Market opportunities in large enterprise, healthcare, government
However, there will still be market opportunities for AV integrators and other technology providers during this global fight against the virus.
According to IDC, the larger the market opportunity for IT spending, the shorter the fall.
In much larger market opportunities for technology like manufacturing, IT spending will decline at least 3%. Government, healthcare, telecommunications and other recession resistant industries will fare a bit better, with IT spending forecast to grow slightly.
Professional services will see the strongest growth in spending with an expected 2020 increase of 1.7%, according to IDC.
Simultaneously, large businesses with 500 to 999 employees and large organizations with over 1,000 employees are a much larger market opportunity, with both groups forecasting IT spending reductions of at least 1%.
Prioritize software, collaboration platforms over hardware
The biggest IT reductions will be on hardware, with spending expected to fall by more than 5%. IT services and business services should see only a slight decrease in spending as companies focus on business continuity and keeping services on.
Software will win in 2020, with spending expected to grow almost 2% thanks to purchases of collaboration and communication platforms.
