IT Spend 2020: CIOs Focus on Digital Transformation in a COVID-19 Era

If digital transformation wasn’t a CIO priority for 2020, it is now.

As business strategies and priorities pivot as a result of the impacts of COVID-19, including the increase of remote workforces, a recession, and the continuous introduction of new and evolving risks, CIOs are shifting IT spend to ‘mission-critical’ technologies that will reduce risk and maintain business continuity in the now, while preparing for success and growth in the future.

To help companies understand COVID-19’s impact on technology, including current IT software buying trends, we compiled research from various sources to understand general shifts in spend, as well as identify which technology categories are being prioritized to drive digital growth in a COVID-19 era.

Despite a Projected Decline in IT Spend, Communications Services and Enterprise Software Feel Least Impact

According to recent research by Gartner, IT spend is expected to decline by 8% globally from 2019. Looking at various technology segments, it is projected that each will experience a drop in growth in 2020, with data centers and devices impacted the most. Communications services and enterprise software are the least impacted, as they help enable a virtual workforce and keep businesses moving forward despite the location of staff.

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

Although spend is expected to contract, a quick search for ‘IT software’ on Google Trends shows that buyers still have an appetite for new technologies and continue to research for new systems just as actively as pre-pandemic.

Software That Enables Virtual Interactions and Transactions are Gaining Popularity Following the Pandemic

While general IT spend is contracting across the board, it is not all doom and gloom. According to research by software review platform TrustRadius, many buyers are investing in new, digital, cloud-based technology systems including web conferencing, electronic signage, antivirus software, mobile app development, and SaaS, among other areas. As disruption continues to be the new normal, these technologies are providing corporations with an opportunity to innovate the way they do business.

And as the ripple effect of COVID-19 continues to hit new industries and organizations, other software segments including eCommerce and managed IT are also identified as being on the rise. The charts below demonstrate the increase in interest for both software services over the last six months.

Digital-First Technology is Serving as a Solution for Disruption

Overall, the underlying takeaway from this data and research is that the digital revolution has been expedited and that digital technology has proven to be the solution for inevitable disruption.

A few examples:

• Web conferencing platforms have served as a viable solution for face-to-face interaction and collaboration as shelter-in-place guidelines required workforces to go remote;
• Heightened antivirus, network security, and managed IT systems are protecting businesses from the continued increase in cybercrime;
• As brick & mortar stores closed doors, eCommerce served as a valuable lifeline for retailers and restaurants working to keep themselves afloat as consumer spending declined;
• The use of electronic signage and business cards has helped ensure partnerships and deals move forward;
• As events and conferences were canceled, webinar services provided a platform for virtual events and engagement for leaders.

While these are just a few examples, many businesses are moving forward with their plans for re-opening as we speak, which will bring yet another wave of uncertainty and disruption. And as business leaders continue to navigate through, we believe digital technology will continue to serve as a solution for continued performance, and eventually, transformation.

“The last ten years of IT have been about changing the way people work. The next ten years of IT will be about transforming your business.”
— Aaron Levie, CEO, BOX