Gartner slashes IT spending forecast

Gartner slashes IT spending forecast

Global research firm Gartner has cut Thailand's 2020 IT spending forecast to 649 billion baht, a drop of 9.3% from last year, with the biggest fall predicted in the device segment because of the pandemic.

The company predicted in January IT spending in Thailand would grow to 752 billion baht in 2020, up 2.45% from 734 billion in 2019.

Devices, which cover PCs, tablets and smartphones, would see an 18.1% dive to 148 billion baht, the largest drop among IT spending, followed by data centres decreasing 17.9% to 20.8 billion, said Gartner. IT service will decline 6.7% to 56.5 billion baht, communications services will fall 5.9% to 386 billion and enterprise software will dip 3.6% to 37.8 billion.

In 2019, IT spending in Thailand reached 716 billion baht, up 0.9% from a year earlier.

Across the globe, Gartner indicated IT spending is projected to total US$3.4 trillion in 2020, a drop of 8% from a year earlier.

"The pandemic and the subsequent global economic recession are causing chief information officers to prioritise spending on technology and services that are deemed 'mission-critical' over initiatives aimed at growth or transformation," said John-David Lovelock, distinguished research vice-president of Gartner.

With emergency cost optimisation, investments will be minimised and operations that keep the business running this year will be prioritised, he said.

"Recovery will not follow previous patterns as the forces behind this recession will create both supply-side and demand-side shocks as the public health, social and commercial restrictions begin to lessen," said Mr Lovelock.

At the global level, IT spending will decline throughout all segments this year. The biggest drop is predicted for devices with a fall of 15.5%, followed by data centres dipping 9.7%, IT services down 7.7%, enterprise software declining 6.9% and communication services decreasing 4.5%.

Some sub-segments, such as public cloud services, are projected to see growth this year, driven by remote working measures caused by the pandemic. Spending on public cloud service is predicted to rise 19% this year, Gartner indicated.

Cloud-based telephony and messaging and cloud-based conferencing will also see high levels of spending, growing 8.9% and 24.3%, respectively.

"In 2020, some longer-term cloud-based transformational projects may be put on hiatus, but overall cloud spending levels projected for 2023 and 2024 could show up in 2022," he said.

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