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Aussie enterprises flag ICT budget fall due to COVID-19

Aussie enterprises flag ICT budget fall due to COVID-19

50 per cent in total expect to see budgets fall

Credit: Foto 2442423 © Robyn Mackenzie - Dreamstime.com

Half of Australian enterprises are expecting to see ICT budgets decline by the end of 2020 as a result of the coronavirus pandemic.

A third of those responsible for enterprise ICT budgets (at 33.3 per cent) have flagged they expect their enterprise ICT budgets will decline by approximately 10 per cent.

An additional 16.7 per cent expect their budgets to decline by more than 20 per cent, according to GlobalData’s Enterprise ICT Investment Trends in Australia 2020 Report.

Meanwhile, 20 per cent expect to increase their budgets by about 5 per cent, and 6.7 per cent expect an increase of over 10 per cent.

GlobalData analysis claims these enterprises with expected IT budget growth will funnel through to IT related products and service providers.

The remaining 23.3 per cent indicated they believe their budgets would remain at the same level.

Saurabh Daga, technology analyst at GlobalData, said that despite Australia's relative success in stemming the outbreak in the country, there are still underlying issues being felt by businesses.

“While Australia has been relatively successful so far in containing the COVID-19 outbreak and is beginning to relax lockdown measures, several business enterprises in the country are still reeling under the uncertainty created by what can now be termed as a global pandemic,” Daga said.

The decision to largely cut enterprise ICT budgets comes as research firm Gartner predicted in May that Australia’s IT spend will fall by 6 per cent in 2020, down to $88.8 billion.

This includes spending on information security technology, with a separate Gartner forecast from June claiming a local decline of 5.6 per cent for the market segment is on the cards, to $4 billion.

Meanwhile, worldwide IT spending is forecast to drop further at 8 per cent, down to US$3.5 trillion. 

These declines are a result of CIOs prioritising mission-critical spending for business continuity as they shift away from growth opportunities, according to John-David Lovelock, chief forecaster at Gartner.

However, IDC research claimed in May there could be a global reversal in IT spending as early as 2021, reaching back up to 5.1 per cent. This would put IT spending on par to pre-pandemic levels from 2019.



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