Date:09/06/20
Technology and business services spending will see a more than 10% decline in 2020 globally due the pandemic-led slowdown across industry sectors, IT research and advisory firm HfS Research has said.
The impact on gross domestic product (GDP) from the second quarter of 2020 is expected to be 10-15% in all major Western European and North American markets, resulting in a sharp fall in IT services spending by organisations, it said.
HfS said economic recovery to pre-Covid levels is unlikely until the second half of 2021.
“While we have had some awesome developments in areas like digital technology, cloud and automation, the underlying way services have been bought and sold has not fundamentally changed,” Phil Fersht and Jamie Snowdon of HfS Research said in a blog. “Suddenly, many clients facing huge survival challenges (such as in travel and manufacturing sectors), coupled with the downward pressure on pricing is sending large parts of the services industry into a tailspin.”
The impact on operational services will not hit revenues in Q1, but will gradually affect the market as deal signings slow significantly and are deferred to Q1 2022. “We have seen deal volumes reduce by a half for March and April,” they said. HfS said business is not as usual since “a significant amount of work” remain incomplete due to local lockdowns.
IT services spend may fall over 10%, shows research
Technology and business services spending will see a more than 10% decline in 2020 globally due the pandemic-led slowdown across industry sectors, IT research and advisory firm HfS Research has said.The impact on gross domestic product (GDP) from the second quarter of 2020 is expected to be 10-15% in all major Western European and North American markets, resulting in a sharp fall in IT services spending by organisations, it said.
HfS said economic recovery to pre-Covid levels is unlikely until the second half of 2021.
“While we have had some awesome developments in areas like digital technology, cloud and automation, the underlying way services have been bought and sold has not fundamentally changed,” Phil Fersht and Jamie Snowdon of HfS Research said in a blog. “Suddenly, many clients facing huge survival challenges (such as in travel and manufacturing sectors), coupled with the downward pressure on pricing is sending large parts of the services industry into a tailspin.”
The impact on operational services will not hit revenues in Q1, but will gradually affect the market as deal signings slow significantly and are deferred to Q1 2022. “We have seen deal volumes reduce by a half for March and April,” they said. HfS said business is not as usual since “a significant amount of work” remain incomplete due to local lockdowns.
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