New study says IT budgets are done with cuts or projected to climb in third quarter
The time of frozen and fractured IT budgets is nearly over, according to a study conducted by research firm Pulse. IT leaders at end-user organizations expect an end to cuts and paused projects beginning in July. Some even expect budgets to climb as the economy rumbles back to life following the COVID-19 pandemic.
The Lowdown: According to Pulse, 72% of IT budgets were frozen or cut in May as a result of the pandemic. Companies across the board, from enterprises to SMBs, slashed their IT spending as they curtailed their business operations to comply with social distancing or dealt with the economic slowdown caused by the pandemic. The good news is that only 49% expect further cuts or no release of funding in June and July. The rest — 51% — expect IT budgets to climb in July as economic activity returns.
The Details: The study’s findings do not show a free flow of funding for IT projects, but rather spending directed at building systems that enable remote working and resiliency to disruptions. The biggest investments are going toward communications and collaboration systems, security, cloud computing, and mobile applications.
Most of the surveyed senior IT leaders expect their second half IT budgets to at least return to their 2019 levels or pre-pandemic spending targets.
The Impact: The Pulse survey of senior IT executives reflects the perceptions of vendors and solution providers that IT spending will rebound in the second half of 2020. According to research by The 2112 Group, which publishes Channelnomics, vendors and solution providers are increasingly optimistic that the IT industry and channel will recover from the pandemic’s economic consequences faster than other industries.