Enterprise Tech Spending Could Take Years to Recover from Covid

Covid Money

The coronavirus and the economic breakers that came with it has forced employers to rethink their technology spending and priorities, with many of them resetting their budgets to focus only on critical projects. As a result, transformation and growth initiatives, which were expected to gain both attention and money during 2020, have been back-burnered or suspended.

The not-unexpected result: a significant decline in IT spending. According to the financial news site Buy Shares, global technology spending will drop by 5.5% this year from 2019, or about $210 billion.

#COVID-19's impact on enterprise technology spending's been dramatic, and it'll be years before the market fully recovers, analysts say. #HR #HRTech Share on X

Since 2015, IT spending had been growing annually, said Buy Shares. According to Gartner data, that year companies spent over $3.3 trillion on IT technology and services, which rose to $3.4 trillion in 2016. In 2018, organizations spent more than $3.7 trillion on IT, then another $3.8 trillion in 2019. This year, analysts expect spending to fall to some $3.6 trillion, Buy Shares said.

Organizations will spend 3.7% less on enterprise software this year, or about $459 billion. Data center systems budgets are expected to slip 3.2%, to $208 billion.

Spending on IT services is expected to drop by 4.6% to $992 billion this year, while purchases on

devices like PCs, tablets, mobile phones and printers will drop by an estimated 13.4%, to around $616 billion.

Gartner’s data predicts that IT spending will begin recovering ground in 2021, growing by 4% to hit $3.7 trillion. That’s still a 1.6% drop from 2019, Buy Shares pointed out.

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