The conclusion of last year’s delivery of this article stated that “the IT budget is complicated at best, but by 2020, greater assistance from political and economic instability, perhaps even the global recession, will make things even more complicated for CIOs.”in a context of tensions in foreign industry, that is, between the US and the US, the United States and the United States, the United States and the United States, have not beenTHE US and China, and, in Europe, the UK’s prolonged and painful departure from the European Union following Brgo’s 2016 referendum.
None of those points have disappeared, but of course they have been overshadowed by the COVID-19 pandemic, which began in Wuhan, China, in December 2019 and has come to dominate the fortunes and agendas of Americans. and families, businesses, organizations, and nations. .
In this article, we’ll summarize emerging macroeconomic trends, read about analyst forecasts for IT spending in 2020/21, and read about IT professionals’ responses to budget survey questionnaires to get a concept of how the IT industry is more likely to deal with the pandemic.
In its report on the state and outlook for the world economy in mid-2020, published on May 13, the United Nations Department of Economic and Social Affairs (DESA) forecast a contraction of 3.2% in the world economy. in 2020 and losses of “nearly $ 8.5 trillion in production over the next two years due to the COVID-19 pandemic” due to the IDDF-19 pandemic. Array erasing almost all earnings from the last 4 years. “
In early 2020, in a report without reference to COVID, coronavirus or pandemic, UN DAES predicted an imaginable global economic expansion of 2.5%, or 1.8% in a ‘bearish scenario’.3.2, dubbed “the biggest contraction since the Great Depression of the 1930s,” shows how the pandemic hit the global economy with blockages, interrupted source chains, depressed customer calls, and task losses.
The revised DAES benchmark foresees an expansion of global production by 4.1% in 2021 after the 3.2% contraction in 2020, implying that blocking measures will have slowed the spread of COVID-19 and global economic activity will resume from the third quarter of 2020.Of course, none of this can be taken for granted, so there are situations of choice.The UN’s “pessimistic” outlook, which follows a momentary wave of pandemics and new blockades, causes economic output to collapse by 4.7% by 2020 and recover through only 0.5% by 2021.The “optimistic” situation, based on fortunate follow-up, test and remedy systems and symptoms of good luck in the search for a vaccine, sees a superficial contraction (1.4%) 2020 and a more physically powerful effect recovery (6.1%) 2021.
Among the consequences of the pandemic reported through the United Nations is the fact that the crisis is likely to drive the transition to digitization, and that corporations that are more in the path of virtual transformation will perform better: “Companies that have invested in virtual technologies and education have been relatively more successful in dealing with the crisis than those that have not.In particular, the ability to paint remotely has become important to ensure business continuity.a contribution to growing inequalities between giant and small businesses, as many will fail in the existing crisis,” says the mid-2020 report.
The recent functionality of the UK economy shows what a global pandemic can do to a country’s finances. According to the Office for National Statistics (ONE), the UK’s gross domestic product (GDP) fell to a record 20.4% in the second quarter of 2020 (April-June) – the consecutive quarterly decline after a 2.2% decline in the first quarter (January-March), pushing the UK into recession. The magnitude of the 2020 recession connected to COVID eclipses the slowdown through the 2007-9 global currency crisis:
Record quarterly drops in services, production and structure in the current quarter, i.e. in industries that are at maximum exposed to government restrictions, the ONS said.is still well below the February 2020 point of 105.5.
The ONS compared the recent monetary functionality of the United Kingdom with other countries of primary evolution and found that UK GDP fell 22.1% in the first part of 2020, just below the 22.7% observed in Spain, but more than double the 10.6% drop in the US.But it’s not the first time The other countries were France (-18.9%), Italy (-17.1%) Germany (-11.9%).
The ONS noted that: “The biggest contraction in the UK economy basically reflects how blocking measures have been in position for much of this era in the UK compared to those other economies.The Oxford COVID-19 Government Response Tracker captures this data by collecting data on government policy responses to create a “rigorous” index.According to this measure, the UK had an average of 73 in the quarter of the time, the highest time of the countries [analyzed].”
To complete this picture, we have defined the decline in GDP in the first part of 2020 to this quarter’s blocking rate for the six countries:
Gartner According to Gartner’s most recent research (July 13), global IT spending will amount to $3.5 trillion by 2020, 7.3% less than in 2019.All industry segments will revel in declines, Gartner said, ranging from -16.1% in gadgets, despite “a cumulative transitority in device purchases while corporations have implemented business continuity plans for COVID-19 reaction” – to -3.3% in the communication services:
Gartner expects revenue to decline and IT projects resume, CIOs will “turn to spending on subscription and cloud products to reduce anticipated costs.”The cloud-based convention will see a 46.7 percent increase in 2020, for example, while Gartner forecasts 13.4% expansion in IaaS (infrastructure as a service) to $50.4 billion in 2020 and expansion from 27.6% to $64.3 billion in 2021.
Overall, the analyst company is cautiously positive about IT spending by 2020/21, hoping that the recovery will outweigh that of the economy as a whole.
“With lockdown restrictions easing, many companies will soon return to a higher point of earnings certainty, allowing some currency constraints to ease and CIOs to resume spending on IT. This pause and restart will drive further expansion. beyond 2020 and into 2021, “John said. -David Lovelock, Distinguished Vice President of Research, Gartner. But, he added, “the graceful recovery in top IT spending masks a very turbulent recovery in some countries, industries and markets.”
To help businesses and business groups overcome the pandemic, Gartner has developed a three-phase plan planning framework: response, recovery and renewal, and has charted possible, positive and negative routes and outcomes:
As locks fade around the world, many companies will be in the “recovery” phase: they will restart their operations, re-budget, and make plans to “restore a scalable state.”However, as Gartner points out: “In the absence of a vaccine or to cure COVID-19, any uptick in business activity can be easily followed through the reaction, recovery, renewal cycle, so it is imperative to temporarily absorb the learned classes and create lasting adjustments in business and business models.
Depending on the type and location of the business, the outcome of this plan-making activity for business units, products or facilities can be positive (resize, reinvent), impartial (return), or negative (reduce, delete).Of course, some entire companies will not suffer the economic upheaval caused by the pandemic.
Forrester Analyst, Forrester, has a number of generational spending forecasts for other parts of the world since the coronavirus pandemic took off.
Report
Date
Summary
Forecast in uncertainty: The US GDP ReportBut it’s not the first time From the second quarter of 2020, it reveals negative surprises to US economic benefits.Hus For the U.S. tech market.
July 30, 2020
A sharp drop in genuine GDP in the second quarter of 2020 paves the way for what looks like an impressive uptick in the third quarter of 2020, but the economic downturn will not end and will possibly worsen.Conversely: weak investment in software is probably a forerunner of more decline
Forrester predicts EU generation spending could fall to 9% by 2020 due to coronavirus pandemic
July 23, 2020
United Kingdom: technology spending will fall to 9.3% by 2020 and 1.1% by 2021 (computer equipment -9%, communications devices -11%, software -10% by 2020) • France: technology spending will fall to 6.6% by 2020; 6.3% expansion in 2021 (technology consultancy -7%, technology outsourcing -7%, software
Forrester lowers Australia’s generation spending forecasts
June 24, 2020
Scenario A (very likely): spending in generation fell by 2.7% in 2020; Growth of 4.5% in 2021 (technological outsourcing suffers slowing, software spending leads to recovery) – Scenario B: spending on generation fell by 6.4% in 2020; Growth of 1.7% in 2021 (collapse in software spending, service spending; lower hardware and telecommunications crisis than the last crisis [2008/9]; hardware upgrades are leading to recovery).
COVID-19 Will Drive India’s Slowest Tech Spending Growth Over The Last Decade; Could shrink up to 4.8%
May 29, 2020
Best case: the expansion of the generation market slows to 1.2% by 2020; 8.4% uptick in 2021 – Worst case: generation spending contracts up to 4.8% in 2020; 1.4% expansion in 2021
Like Gartner, Forrester has created a framework in which CIOs can evaluate their IT budgets as opposed to their company’s business in the pandemic recession (or any other).There are 3 modes: Survival, Adaptation and Growth:
According to Forrester, survival-mode corporations will have to reduce their generation budgets by 30% or more, those in adaptive mode will have to decrease by 10% to 20%, and expansion-based corporations will have to “save while making an expansion investment and major suppliers.”
IoT Analytics It is transparent that the pandemic was the dominant challenge for business leaders in the first component of 2020, with generation being a key component of their tactical and strategic responses.Analysts firm IoT Analytics put some numerical weight on the bones through keyword research into the earnings transcripts of 3,000 US-listed companies.comparing the second quarter of 2020 (during the pandemic) to the fourth quarter of 2019 (prepandemic).
The generation topics were drawn in two lines: ”Importance of keywords” (how a topic was discussed at the time quarter of 2020) and ”Keyword Growth” (mentions at the time quarter 2020 compared to the fourth quarter of 2019, indexed to 100):
Unsurprisingly, remote paintings and similar themes (video conferencing, remote tracking, and remote attention) experienced the greatest expansion in mentions (10x) compared to pre-COVID levels.The source chain some other primary topic, with a peak tripled (2.8x) accumulating in mentions at the time quarter of 2020 compared to pre-pandemic levels.While the cloud did not see an increase in mentions at the time quarter of 2020, it is the peak time cited topic after the source chain.19 accelerates the migration of legacy programs and other commercial paint loads to the cloud, long-term keyword analysis can see an increase in cloud mentions, IoT Analytics said.
What happened in the background in the second trimester?” Digital acceleration did not arrive with IoT, 5G and AI at the time of the quarter (at least not on a giant scale, so this would have a measurable effect on discussions with CEOs).In fact, some AI projects and the more sustainable IoT projects that require site configuration postponed the crisis and were therefore less targeted,” said the firm analyst.However, IoT Analytics said it expected all 3 topics to recover.
Spiceworks’ The State of IT 2020 report provides useful insight into the outlook for IT budgets in September last year, before the pandemic casts shadows on the global economy. The survey population 1,005 buyers of ad technologies from organizations in North America and Europe. spanning from SMEs to commercial and advertising sectors, adding manufacturing, healthcare, non-profit organizations, education, government and finance.
The findings were:
Clearly, this image will have been particularly reviewed during the pandemic.The next survey provides a first look at the scope of this reordering.
Computer economy
Market research firm Computer Economics, acquired through Avasant in February 2020, has published an annual report on IT expenditures and staffing since 1990 and is a valuable source of IT budgeting parameters for North American organizations.233 U.S. and Canadian organizations between January and May 2020 – 34% small ($20 million in IT operating budget) The main business sectors in the survey pattern were production (22.3%), government/non-profit organizations (19.3%) (17.2%).
To get an idea of the effect of the coronavirus pandemic on the computer budget, Computer Economics re-surveyed its survey base in April/May 2020, receiving 77 responses.The composition of this additional pattern was 53.2% small, 35.1% medium and 11.7%.% of giant companies, mainly in the productive sectors (22.1%), professional and technical (18.2%), public / non-profit (16.9%).and Sectors currencyArray (13%).
In early 2020, “companies were in a position for some other year of strong expansion in their operating budget” and more than a portion of IT organizations (52%) planned to develop the IT workforce.”The outlook for the year seemed smart for IT organizations, at least until it hit the global pandemic,” Computer Economics said.
Prior to the pandemic, operating Spending on IT was expected to increase to 3% in the median, above the inflation rate.”Of all our findings, this is the maximum affected by the pandemic,” the report says.54% net of organizations planned to increase their IT budgets, the report noted that “this number is very unlikely to continue.”
More encouraging for IT organizations looking to cope with a recession is that in the early 2020s, only 44% of respondents, an all-time low, felt that their IT budgets were “enough” or “very” inadequate to meet the wishes of Computer Economics, the driving force behind this (cutting the internal infrastructure to SaaS and cloud infrastructure) means that “IT organizations have already made many investments that will contribute to recession.”
In terms of IT spending priorities, the cloud (programs and infrastructure) has led the way in the survey, following a trend in recent years that, according to Computer Economics, continues:
“While budgets for new projects are likely to be suspended [due to the pandemic], we do not expect those priorities to change,” the report says.
What does the Computer Economics follow-up survey (also discussed in this webinar) reveal about the effect of the pandemic on the IT budget until May 2020?”Currently, the answer is perhaps a little surprising. By May 2020, the top of corporations had not replaced their IT spending budgets.And those who have cut their budgets have not made very significant cuts.A small but remarkable organization is even expanding its IT spending, basically to increase the number of remote workers.Most corporations are lurking.-and-see the mode “.
Specifically, 57% of organizations said they left their IT operating budgets unchanged in May, while 30% cut spending and increased their budgets by 13%.Among 30% of companies that are cutting IT spending, the midpoint was low— only 5%.The reason, Computer Economics suggests, is uncertainty: corporations “just don’t know if the cuts will be mandatory or, if so, how much.”
Investment budgets suffer in recession, and the additional survey revealed that while 61% of organizations leave them unchanged, 28% has fallen and 11% is rising, the midpoint of cuts was deeper by 25%.”It makes sense, “Computer Economics said. A quick way to save cash is to increase the life of the equipment.”
Reducing staff is another way to save money, and the April/May survey showed that 22% of organizations reported RELIEF from IT staff, with a midpoint of 10%.”If economic situations don’t do it at the time of year, it’s more likely there will be more layoffs,” Computer Economics warned.One option to layoffs is pay relief, which 24% of organizations say continue, with a median of 10%.Outsourcing titles remained stable, with two-thirds (67%) budgets remain unchanged, with a quarter (26%) downwards and only 7% increasing.Among those who reduced their outsourcing spending, the median was 20%.
Much of the budget stagnation revealed through Computer Economics’ April/May follow-up survey reflects a high degree of uncertainty among organizations about how the pandemic will develop.For example, the survey also found that 60% of corporations have not replaced their budgets for new projects.(33% less, 7% increase), with a pop-up symbol for cloud budgets (78% unsused, 8% down, 14% increase).
However, cloud spending can be a successful domain of charge relief in the future.”Cloud rates are becoming fast, and if IT managers don’t review their cloud agreements, they’ll most likely overpay,” Computer Economics said.Cloud service providers (Amazon, Microsoft, and Google) provide their own load control tools, and third-party responses for users from multiple clouds must be obtained from vendors such as Apptio, CloudCheckr, and Flexera.
Respondents were positive about the most likely duration of budget cuts due to the pandemic and the resulting recession, and 43% expected a return to the general in six months:
The market research company itself has been more cautious, noting that “the duration and intensity of the recession depends on many variables, adding whether additional blockages are needed, how temporarily a vaccine should be and the scope of additional stimulus systems.”
Industrial sectors, of course, will be affected by the coronavirus pandemic, as will other corporations within the sectors. Here is a summary of Computer Economics’ initial projections, showing the magnitude and intensity of the most likely operational budget cuts across all sectors:
In all sectors (red bar, above), Computer Economics expects that some of the decrease in IT operating spending, among corporations that are cutting their budgets, is between -5% (25th percentile) and -11% (percentile 75), with the largest obvious variation in the retail sector (0% to -15%).In fact, corporations with a strong online component are the most likely to suffer much less, if they suffer, than physical operations like restaurants.Transport and (ironically) the health care sectors also potentially face serious budget cuts related to the pandemic.(The health care projection reflects the fact that most hospitals have postponed regimen procedures, a major source of earnings (in the US).U.S., to conserve the bed area, for patients with coronavirus.)
Summing up the initial reaction of corporations to the uncertainties surrounding the pandemic, Computer Economics said: “The key to managing all of this, from the point of view of the IT organization, is agility and flexibility.Once a load center, virtual transformation makes IT an essential component of how business is conducted in this crisis.”
A follow-up survey is being conducted lately, and an updated report is expected by early October.Frank Scavo, President of Computer Economics, provided ZDNet with some initial observations, summarized here:
TechRepublic TechRepublic conducted its own survey to accompany this special report, collecting 62 responses, basically from IT managers (19%), IT managers (18%) AND YES/IT executives (18%).Commercial sectors were led through IT and generation.(13%), education (13%) engineering and structure (13%). Large corporations (500 employees) accounted for 29% of the sample, 34% were of average duration (50-500 employees), while 37% were small (
Two questions focused in particular on the effect of the coronavirus pandemic on the computer budget: First, the majority (62%) respondents said they were adjusting their budgets by 2021:
Second, despite general relief in IT spending, respondents will make understandable exceptions for remote paintings and netpaintings/Internet security:
Nearly one in five companies (19%) it also expects IT to stick to the trend of running from home, while only 17% plan to postpone primary projects.
SEE: 2021 IT Budget Research Report: The Impact of COVID-19 on Projects and Priorities (TechRepublic Premium)
The 2020/21 IT budget cycle was disrupted by the COVID-19 pandemic and the resulting global recession, which the UN compared to the Great Depression of the 1930s.countries experienced in the first part of 2020.
Gartner expects a year-on-year decrease of 7.3% in global generation spending in 2020 to $3.53 trillion lately, with an expansion of 4.3% to $3.68 billion in 2021 (still 3.3% less than the 2019 figure).But the analytics company warns that a relatively elegant recovery in sensible maximum IT spending masks the turbulence between countries, industries and markets.Both Gartner and Forrester offer frames that allow CEOs to plan their way through the pandemic: Gartner is responding to the blockades, recovering when corporations reopen and renew when the “new normal” is established; Forrester’s is addressing the demanding situations that corporations face in survival, adaptation and growth mode (as some corporations will see increasing demand for their products and facilities during the pandemic). An examination through IoT Analytics suggests that remote paintings and source chain disorders were the ultimate technological wisdom maximum vital for CEOs (in the United States) in the quarter moment of 2020.
Computer Economics’ annual IT spending survey, conducted at the time of the pandemic, found that American corporations were, first, able to continue to increase their IT operating budgets by 2020/21, with record levels of respondents who believed their budgets were inadequate.to meet business desires and IT priorities driven through cloud programs and infrastructure. An additional survey in April/May reported that the maximum corporations were in a way to wait and see in relation to their IT budgets and new allocation plans, but sometimes it was positive that an opportunity would return to general within six months (43%) or one year (20%).The market research company estimates that, in all commercial sectors, discounts on the IT operating budget are likely to be between -5% and -11%. A follow-up survey, which will be released in October, will see some changes to those mid-year assignments, adding a more pessimistic perspective of IT managers.
It is not yet known how the global pandemic will spread and the recession it has caused over the next 12 months: will new outbreaks and blockades occur, or will remedies and vaccines open up more positive scenarios?However, virtual transformation has made companies more agile.and is very likely that the existing crisis will drive this trend.As a result, if any other pandemic occurs, or if the existing pandemic worsens, organizations will be even better positioned to respond.
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