11 May 2020 -
 General

Coronavirus drives record Q1 in server market but global IT spending set for 5% decline

Server shipments during the first quarter of 2020 totaled more than 3.3 million, almost 1 million more than the first quarter of 2019, according to technology consultants, Omdia. Vendors achieved record shipments in March, driving a strong close to the first quarter of 2020.

“Enterprises increased their investment in servers as these organizations prepare employees and business processes for remote working. Meanwhile, telecommunications network providers ramped up server deployments to cope with increased demand on wireless and wired networks. As a result, the server market attained a quarter of year-over-year growth exceeding 30%,” said Vlad Galabov, principal analyst for data center IT, at Omdia.

Against this, worldwide IT spending is now expected to decline 5.1% in constant currency terms this year to $2.25 trillion, as the economic impact of the COVD-19 pandemic continues to drive down some categories of tech spending and short-term business investments. A new update to the IDC Worldwide Black Book Live Edition shows ICT spending, which includes telecom and business services, will decline by 3.4% this year to just over $4 trillion with telecom spending down 0.8%. However, IT infrastructure spending is still projected to grow overall by almost 4% to $237 billion with resilient spending by service providers in addition to ongoing enterprise demand for cloud services offsetting declines in business capital spending.

“Inevitably a major economic recession, in Q2 especially, will translate into some big short-term reductions in IT spending by those companies and industries that are directly impacted,” said Stephen Minton, program vice president in IDC’s Customer Insights & Analysis group. “Some firms will cut capital spending and others will either delay new projects or seek to cut costs in other ways. But there are also signs that some parts of the IT market may be more resilient to this economic crash in relative terms than previous recessions with technology now more integral to business operations and continuity than at any time in history.”

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