Global companies whose revenues have taken a hit during the coronavirus pandemic plan to cut technology spending this year by as much as 4.1 per cent, according to the latest survey from U.S.-based Enterprise Technology Research (ETR).
But that forecast drop in tech budgets may be less than initially feared because many companies actually intend to accelerate spending to support thousands of employees that now have to work from home as majority of governments around the world ordered national lockdowns.
Corporate revenue has taken a hit from broken supply chains, less demand from consumers and businesses and productivity losses with most employees working from home.
The fallout from the virus outbreak will result in a cut of between 3.7 per cent to 4.1 per cent in IT spending for 2020, based on ETR's poll this month of about 1,300 of global chief information officers and other senior tech executives.
ETR regularly polls large numbers of CIOs and other senior tech executives about spending intentions.
Going into the year, global tech officials planned to raise spending 4 per cent in 2020.
Sagar Kadakia, ETR's director of research, said that considering that the pandemic has ravaged the global economy amid a worldwide shutdown and the evaporation of consumer demand, the decline in tech spending was not as bad as many initially thought.
That was because a number of organizations indicated an increase in tech spending as they ramp up their "work from home" infrastructure, from an increase of 1 per cent to more than 30 per cent to their annual IT budget, Kadakia added.
About 21 per cent of organisations in ETR's survey thus far have indicated an increase in spending due to the virus.
Global companies that have indicated their intentions to increase spending include those in healthcare, education, and finance.
"With a move to more remote work, we are shifting some spending to mobile devices for users to work remotely," said an information security officer in the education sector in North America. He declined to be named because details about survey participants are confidential.
"This increased our laptop and tablet spend, but we are having issues getting new devices in fast enough from our suppliers."
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alden Bentley and David Gregorio)