5G should boost IT spending in 2020, but soft PC market, plus Coronavirus, may inhibit: IDC


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."

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."

Per IDC analysis, 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.

"Much of the explosive growth in service provider spending from 2016 to 2018 was driven by aggressive roll-out of servers and storage capacity, but more spend is now moving to software and other technologies as these providers seek to drive into higher-margin solution markets including AI and IoT," observes IDC's Minton. "Nevertheless, after infrastructure spending cooled last year, we expect service provider spending to be broadly stable and positive in the next few years because these firms need to keep driving up capacity in order to deliver services to end-users."

IDC's analysts note that "the downside risk to the short-term IT spending forecast is underlined by the importance of China as a driver for much of this growth. China was expected to post IT spending growth of 12% in 2020, up from 4% in 2019, as the U.S. trade deal and a stabilizing economy helped to drive a rebound, especially in smartphone sales. The Coronavirus looks likely to inhibit this growth to something less," adds the report's summary. "It's too early to quantify the spillover impact on other regions, but risks are also now weighted more to the downside in the rest of the Asia/Pacific region (currently forecast to post 5% IT spending growth this year), the United States (+7%), and Western Europe (+3%)," continues IDC.

According to the new report, annual growth of 6% is expected to continue through the five-year forecast period as investments in digital transformation continue to drive stability in overall tech investment. Strong growth will come from cloud, AI, AR/VR, blockchain, IoT, BDA (Big Data and Analytics), and robotics deployments around the world as businesses continue their long-term transition to digital while governments and consumers roll out smart city and smart home technologies.

IDC's Worldwide Black Books provide a quarterly analysis of the current and projected growth of the global IT industry. As the benchmark for consistent, detailed market data across six continents, IDC's Worldwide Black Book: Live Edition offers a profile of the ICT market in the countries where IDC is currently represented and covers the following segments of the ICT market: infrastructure, devices, telecom services, software, IT services, and business services.

The IDC Worldwide Black Book: 3rd Platform Edition provides market forecasts for 3rd Platform and emerging technology growth in 33 core countries across the following markets: cloud, mobility, big data and analytics, social, Internet of Things (IoT), cognitive and artificial intelligence (AI), augmented and virtual reality (AR/VR), 3D printing, security, and robotics.

The Worldwide Black Book: Service Provider Edition provides a view of technology spending by the fast-growing and increasingly important service provider segment, analyzing key opportunities for ICT vendors selling their products and services to cloud, telecom, and other types of service providers.

To learn more, visit www.idc.com

On Feb. 12, 2020, the wireless industry scrapped its largest annual showcase, the Mobile World Congress in Barcelona, Spain, after the Coronavirus outbreak sparked an exodus of participants, scuttling telecom companies' plans just as they’re preparing to roll out new 5G services. Bloomberg  Technology's Mark Gurman reports: