Gartner Worldwide predicts a stop in IT spending of 8 percent this year to $3.4 trillion. This year’s trigger, of course, is the coronavirus pandemic and effects of the looming global recession. The research firm says CIOs will focus on mission-critical purchases over initiatives for growth or transformation. The outlook gives legacy computing a safer ground in IT plans for the year to come.
Gartner says the recovery will be slow through 2020. Industries like entertainment, air transport, and heavy industry will need three years to return to 2019 IT spending levels. Heavy industry is a significant segment of legacy computing. Air carriers still use some HP 3000 applications. By today, that is a group that’s just a fraction of the size in 2010.
It’s an era of emergency cost optimization. “Investments will go toward operations to keep the business running through 2020,” says John-David Lovelock, vice-president at Gartner.
Ten years ago, after the 2008 Recession had bloomed, HP enterprise computer user group Connect surveyed about 100 members. A majority believed the IT economy was rebounding. Sixty percent of respondents said they are “moving from recession to recovery, increasing IT spending.” Slightly fewer members surveyed reported plans to invest in new servers. Connect’s membership centers on the small to midsize companies. Annual revenues are under $500 million.
At UBS, analyst Kevin Dennean says the last post-Great Financial Crisis period started to show recovery in 2009.
New tech adoption must clear traditional hurdles to change. These stand as high costs, worry over risks to current applications and operations, and avoiding changes to current processes. Legacy computing remains the alternative to facing these hurdles.
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