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2020 IT spending growth predicted to stay in the black

Hardware expected to be hit the hardest

IT spending across Asia Pacific, excluding Japan and China (APEJC), in 2020 is still expected to see year-on-year growth of 1.2 per cent despite the COVID-19 coronavirus pandemic, even in a 'pessimistic' scenario.

This is according to the International Data Corporation’s (IDC) February edition of the IDC Worldwide Black Book Live Edition, which previously predicted in January 2020 that the year would see year-on-year growth of over 5.2 per cent due to predicted boosts in hardware, software and services spending on infrastructure.

If Japan and China are including in the updated forecast, spending is predicted to decline by 2 per cent in the region. Global spending is pegged at 1.3 per cent, revised from 5.1 per cent.

In its research, IDC outlined the anticipated growth or contraction of IT spending in the region in terms of a standard expectation as well as a 'pessimistic scenario' expectation.

According to IDC, out of the three major components of IT spending – hardware, software and IT services – hardware is expected to be hit the hardest, with a pessimistic scenario recording a decline of 3 per cent. Previously, growth of 3 per cent was forecast for 2020.

Meanwhile, predicted growth in IT services has been reduced by 1 per cent to 4.6 per cent. Decline is expected for the first eight to nine months of 2020 but will then bounce back in the final three months. 

Software is expected to undergo a slowdown with transportation, manufacturing, retail, personal and consumer services and banking industries all impacted.

Due to the unpredictability of the coronavirus pandemic, IDC noted that this growth forecast is expected to decline following the collection of March data.

Sandra Ng, group vice president of the practice group at IDC Asia Pacific noted the biggest changes following the spread of the pandemic was the shift to work from home (WFH) technologies and supply chain delays.

“Not all organisations have the culture or the experience in enabling a WFH workforce. Even for organisations in the tech industry, the increased capacity load on network, cloud and other technologies is unprecedented,” Ng said.

“Based on the latest data of our Future of Work Employee Survey 2020, in countries like Singapore, India, Hong Kong and A/NZ where considerable organisations provide WFH, we have already seen an uptake of video meetings, audio conference calls, and collaboration platforms as a result of rethinking work.”

Meanwhile, supply chain disruptions were attributed to countries, particularly China, restricting movement of people, according to Christopher Holmes, managing director of IDC Insights Asia Pacific.