IDC predicts 2020 hardware spending will drop by 5%, and software spending will rise by 2%

Forecast suggests healthcare and telecoms may increase IT spending slightly in response to new business demands due to the coronavirus.

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IDC's latest Worldwide ICT Spending Guide recommends that IT vendors refocus their priorities on companies that have the best chance of preserving IT budgets. IT spending in hospitality, transportation, and personal services will take the biggest decline at 5% or more, although these markets are relatively small in terms of IT spending. Manufacturing represents a larger technology market of about $400 billion, and IDC predicts spending will fall in that sector by more than 3% this year.

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Companies in the healthcare and telecommunication sectors may spend slightly more in 2020 in  response to new demands caused by the coronavirus

Jessica Goepfert, program vice president of customer insights and analysis at IDC, said in a press release that technology suppliers must aim their efforts toward the more resilient industries.

"Industries which have suffered major shutdowns and layoffs will be slower to invest in technology than those that have been able to maintain somewhat normal operations," she said. 

Professional services will see the strongest growth in IT spending this year with an expected year-over-year increase of 1.7%. 

The IDC report forecasts the biggest hit for hardware with a spending decline of more than 5% this year, with the assumption that companies will pull back on near-term infrastructure investments. Software spending will do better with a growth of nearly 2% including purchases of collaborative applications and content workflow and management applications. 

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IT services and business services will see only a moderate reduction in spending as companies keep existing operations and mission-critical projects going. 

Small and large businesses will see IT spending fall by more than 1% this year, representing a  $17 billion drop.

A small survey of IT managers in early April found that leaders hope to preserve budgets for cloud infrastructure and save money by investing in self-service technologies to ease staffing requirements on the help desk. 

In early March, Forrester Research recommended that CIOs and their business partners plan for modest increases in their tech budgets but prepare for cuts if needed.

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COVID-19 demonstrates the need for disaster recovery and business continuity plans (TechRepublic Premium)
As coronavirus spreads, here's what's been canceled or closed (CBS News)
Coronavirus: Effective strategies and tools for remote work during a pandemic (ZDNet)
How to track the coronavirus: Dashboard delivers real-time view of the deadly virus (ZDNet)
Coronavirus and COVID-19: All your questions answered (CNET)

Coronavirus: More must-read coverage (TechRepublic on Flipboard)


IDC's latest Worldwide ICT Spending Guide recommends that IT vendors refocus their priorities on companies that have the best chance of preserving IT budgets.

Image: IDC

By Veronica Combs

Veronica Combs is a senior writer at TechRepublic. For more than 10 years, she has covered technology, healthcare, and business strategy. In addition to her writing and editing expertise, she has managed small and large teams at startups and establis...