Pandemic ‘to affect enterprise ICT spend until at least Q4’

Independent analyst firm IDC said it expects enterprise spending on network infrastructure to be impacted by the COVID-19 pandemic, possibly returning to growth by the fourth quarter of the year.

Brad Casemore, IDC’s Research Vice President, Datacenter Networks, said his expectation is that the economic impact of the outbreak on ICT spend generally, and network spend in particular, will be strongest in the first half of the year and will linger into the second half.

“We expect a return to growth by the final quarter of the year,” said Casemore. “The extent of the declines in each quarter and the pace of recovery later in the year will vary by specific technology and global region.”

Casemore stressed that the volatile nature of the pandemic may mean this expected outlook could change.

IDC has identified the cancellation of events, recommendations to restrict travel, and the temporary shuttering of some business operations as causes of the impact on global ICT markets, and in particular on enterprise network infrastructure

Within the network infrastructure market, IDC has forecast the Ethernet switch market to grow 3.7 percentage points below original growth forecasts, to -0.7% growth for the full year.

IDC is forecasting the enterprise wireless local area network market to decline by 4.8 percentage points compared to pre-pandemic estimates, from 5.7% growth to 0.9% growth.

“The enterprise WLAN market is in the midst of a significant refresh as the i-i 6 standard ramps up quickly in the market,” said Casemore. “This natural refresh cycle will buoy the enterprise WLAN market during this time of reduced spending.”

Another factor contributing to reduced forecasts for the Ethernet switch and enterprise WLAN markets in 2020 is a weaker-than-expected fourth quarter of 2019 in these markets, he pointed out: “Before COVID-19 began spreading, the Ethernet switch and WLAN markets displayed weakness due to macroeconomic issues such as the United States–China trade war and Brexit,” added Casemore. “COVID-19 will further weaken the market, extending that weakness through the first half of 2020.”

The general trend for reduced spending is being bucked by investment in hyperscale data centre capacity by major cloud service providers, said IDC.

Use this link to find out more.

https://www.idc.com/misc/covid19?tab=research

https://www.idc.com/getdoc.jsp?containerId=US46144720

https://www.idc.com/getdoc.jsp?containerId=PRF004078

Recent Posts

Categories

Share on facebook
Share on twitter
Share on email
Share on linkedin