COVID-19 surprise! IT spending on software to grow by 2%

U.S. continues to pace technology spending
COVID-19 has hit just about every sector and will continue to hurt IT spending for 2020. Software spending on collaborative apps will grow, however. (Pixabay)

Analyst firm IDC on Tuesday forecast a 2.7% decline in IT spending in nearly every industry this year due to the economic impact of COVID-19.

Software is a big exception, with growth of nearly 2% projected.IDC said the 2% climb in IT spending on software will be led by collaborative apps, content workflow and management apps.

IT spending in the discrete and process manufacturing areas is expected to fall by more than 3% in 2020. The combined markets represent nearly $400 billion in IT spending, one of the largest categories.

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The IT spending decline will hit transportation and personal and consumer services by the greatest amount, about 5%, IDC said. Those markets are not as large as manufacturing spending, which will somewhat limit the impact.

On the other hand, IT spending in healthcare and telecom is forecast to grow slightly in response to the pandemic. Professional services will grow the most, with an increase of 1.7%, IDC said.

“Industries that have suffered major shutdowns and layoffs will be slower to invest in technology than those that have been able to maintain somewhat normal operations,” said Jessica Goepfert, a program vice president at IDC. “In order to mitigate risk and exposure in the economic downturn, technology suppliers must reprioritize and refocus their efforts toward more resilient segments.”

Small offices with fewer than 10 employees could see IT spending down by nearly 5%, while small businesses of up 99 workers will see a decline of 2.7%. The largest businesses will see an IT spending decline by 1% in 2020, representing a decline overall of $17 billion. Hardware and related infrastructure investments will be harder hit than services, with hardware declines of more than 5%.

RELATED: TSMC foundry sees 45% hike in 1Q revenue, reaching $10.3B

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