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Top 2020 IT priorities hold fast amid COVID-19; spending takes hit

 

A bright spot on IT spending: the cloud

Both Gartner and IDC expect spending to be down this year in all technology categories except cloud services, which they forecast will see double-digit growth. IDC analyst Stephen Minton said in the May 7 webcast that he thinks IaaS spending will increase Other than that, Minton sees potential spending increases only for some specific technologies in response to the virus outbreak. For example, in an IDC survey of IT buyers conducted this spring, the top technologies cited Niernberg and Patil also pointed to increased interest in technologies — such as software-defined wide area networks and desktop as a service tools — that, like cloud services, can be purchased via subscriptions and budgeted as operating expenses without requiring large capital expenditures upfront. Growing use of the cloud was already driving a shift from Capex to Opex spending, “but this put the pedal to the metal,” Niernberg said.

Minton said enterprise IT demand remains fundamentally strong, and he expects IT spending to rebound once the economy improves. But he cautioned that even IDC’s pessimistic scenario isn’t a worst-case one. If the COVID-19 crisis intensifies and requires new lockdowns, CIOs may have to further revise their IT priorities and spending plans, he said. “That brings up issues that I don’t think any of us want to think about, but we do have to think about.”

At O.C. Tanner, Nickolaisen said he hasn’t made any changes to the company’s long-term IT plans because he hopes the pandemic’s business impact will be temporary. For example, a phone system update is still planned for 2021. But company executives will look at where things stand later this year and see if further IT spending adjustments are needed.

“I tell my team that if the downturn is deep, we’ll have to do something else, or if the downturn is long, we’ll have to do something else,” he said. “But I don’t expect that we’ll have to do much more. At least, that’s the hope.”

Editor at large David Essex and executive editor Ed Burns also contributed to this story.

 

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