The corona virus outbreak is now officially a pandemic, and companies are obviously noticing the consequences. According to research bureau IDC, the financial consequences will specifically be noticeable in IT.
IDC initially expected a 4% growth in IT spending in 2020, but due to the effects of the corona virus, the agency expects that this forecast will have to be revised downwards. The exact percentage is uncertain, but IDC expects a decrease that will ultimately result in only 1% growth.
IDC’s worst-case scenario is that total IT spending will fall from 2.5 trillion dollars (2,500,000,000) to 2.3 trillion.
On the other hand, there could be a positive consequence of the outbreak: a sudden upturn in expenditure on solutions needed for remote working. Since in most of the affected countries it is recommended that staff work at home, companies might need more IT-solutions to do so. If new solutions are needed, the decrease in spending could be less significant. In that case, for example, companies will start using cloud solutions more quickly because they have not counted on such large numbers of home workers. However, IDC does think that such an upturn would not be large enough to prevent the overall decline.
IDC states that the projected decline is mostly due to contingency plans drawn up by companies with delivery and service problems related to the virus. When these plans come into effect, IT is usually hit hardest. This is because companies often cut back on technology projects and hardware. In such cases, they would rather use their money to keep their business running.