IDC: 5G could boost 2020 IT spending

Worldwide IT spending is set to increase by 5% in constant currency this year as software and services investment remains stable while smartphone sales recover on the back of a 5G-driven upgrade cycle in the second half of the year, according to an update to the International Data Corporation (IDC) Worldwide Black Books.

“Much of this year’s growth is dependent on a positive smartphone cycle as the year progresses, but this is under threat from disruption caused by the Coronavirus crisis,” said Stephen Minton, program vice president in IDC’s Customer Insights & Analysis group. “Our current forecast is for broadly stable tech spending in 2020, but PC sales will be way down on last year, while server/storage investments will not recover to the levels of growth seen in 2018 when hyperscale service providers were deploying new datacenters at an aggressive pace.”

Some highlights from IDC:

• Excluding smartphones, IT spending will dip from 7% growth in 2019 to 4% in 2020. 
• Software growth will decelerate slightly from last year’s 10% to less than 9% and IT services growth will dip from 4% to 3%.
• Most of the slowdown will be due to the PC market where the end of the recent buying cycle (partly driven by Windows 10 upgrades) will see PC sales decline by 6% this year compared to 7% growth in PC spending last year.
• Hyperscale service provider IT spending will recover to 9% growth this year, up from just 3% in 2019, but this is short of the pace of two years ago. 
• Cloud infrastructure and digital services providers will also continue to increase their IT budgets in order to meet strong end-user demand for cloud and digital services, which will continue to expand at a double-digit rate of growth as enterprise buyers increasingly shift their IT budgets to the as-a-service model.

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