Search
Homepage This page's url is: -crn- Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Jobs HPE Zone HPE Discover 2019 News Cisco Partner Summit 2019 News Cisco Wi-Fi 6 Newsroom Dell Technologies Newsroom Hitachi Vantara Newsroom HP Reinvent Newsroom IBM Newsroom The IoT Integrator Lenovo Newsroom Lexmark Newsroom NetApp Data Fabric NetApp Insight 2019 News Cisco Live Newsroom Intel Tech Provider Zone

IDC IT Spending Forecast Cut Due To Coronavirus; No Slowdown For Partners Yet

‘I’ve got some customers asking for relatively large server orders because they’re concerned that six months from now, the stock might not be there. So it’s almost like customers are looking for some commodity IT items like the rest of us are doing for toilet paper,’ says Rick Gouin, CTO for Winslow Technology Group.

Market research firm IDC has cut its IT spending forecast for 2020, expecting to see a “significant slowdown” in hardware along with software and services spending as the coronavirus pandemic continues to spread across the globe.

IDC now forecasts only 1 percent growth in IT spending in 2020, compared to its original expectation in January of 5 percent growth year over year, adding that its spending forecast is likely to lower further over the next few weeks due to the increasingly impact of the coronavirus.

"Our monthly data and surveys are clearly pointing in one direction, but it's still early to understand the full impact of the coronavirus crisis across all sectors of the economy,” said Stephen Minton, vice president of IDC’s Customer Insights & Analysis group in a statement. “We are using scenario models to illustrate that forecasts have a wider range than usual, and the downside risks in those models seem to be increasing every day. But the duration of the crisis remains a big unknown and will go a long way in determining overall market growth for the year as a whole. … Things could get worse, but hopefully not.”

[Related: Dell Employee Tests Positive For Coronavirus After Visiting HQ]

However, channel partners tell CRN there has been no impact on customer spending as of today while some partners are actually witnessing an uptick in IT spending due to the coronavirus concerns.

“I actually have customers who are stocking up on IT,” said Rick Gouin, chief technology officer for Winslow Technology Group, a Waltham, Mass.-based Dell Technologies partner and 2019 CRN Triple Crown award winner. “So I’ve got some customers asking for relatively large server orders because they’re concerned that six months from now, the stock might not be there. So it’s almost like customers are looking for some commodity IT items like the rest of us are doing for toilet paper. That was an unexpected effect.”

Gouin said his company is also seeing an uptick in remote-worker technologies such as laptops and teleconferencing products.

“We have some large institutions now that are trying to make sure they get all their workers laptops in the event that they have to work remotely,” said Gouin. “I have some school systems and organizations that have traditional office workers now looking to place urgent laptop orders that they can get laptops out to all of their workers who were previously stationary.”

Paul Cohen, vice president of sales for New York-based PKA Technologies, one of HPE's top Platinum partners, said there are many unknowns ahead but PKA’s sales pipeline is so far holding up in the midst of the coronavirus.

“We just closed $1 million [HPE] Nimble [all-flash storage] order,” he said. “That was a long time coming. We have spent seven months building a healthy pipeline and there may be a portion of that pipeline that may not be fulfilled. We just don’t know. We continue to have remote meetings and there is still demand. Customers – especially public sector- still have responsibility to support their end users. We had meetings yesterday where we developed seven new opportunities. But again, the fact is we don’t know what we don’t know.”

PKA is also seeing work-at-home opportunities in the wake of the coronavirus. “Our pipeline is building for laptops and work at home devices,” Cohen said.

All in all, PKA is continuing to build solutions aimed at driving business outcomes for customers, said Cohen. “Customers are still working and we need to be there for them,” he said. “We are constantly consulting, managing and working through all of this with our customers during this very difficult time.”

Mike Vencel, president of Comport Consulting an HPE Platinum partner headquartered in Ramsey, N.J., said Comport is first and foremost focused on the “health and wellbeing” of its employees, partners and customers, but so far is seeing demand holding up.

“We are seeing good order flow,” he said. “We haven’t seen any material change in the economics of the business. But I think it is too early to tell what the effect is going to be on the channel and on our business.”

A number of Comport customers are moving rapidly forward with mobile workforce solutions. Among the Comport offerings that being brought to bear are Aruba RAPs (remote access points) and virtual desktop offerings for home offices through the ComportSecure managed service offerings, said Vencel.

“We are spending a lot of time helping our customers be able to work securely at home leveraging products like Aruba RAPs or virtual desktops through the cloud with our ComportSecure business,” he said.

Comport is also making sure customers understand supply chain issues that could crop up with the Coronavirus crises, he said. “We are learning how interconnected the worldwide supply chain really is,” he said. “It only takes one problem – one component – to make a product non deliverable.”

Ultimately, Comport is focused on acting as a trusted advisor making sure it is coming to the fore as a “steady hand on the wheel” for employees, customers and vendor partners, said Vencel.

“Top of mind for us is to keep everyone safe,” he said. “We started thinking about these scenarios three weeks ago. All of us in leadership positions are in the business of evaluating and calculating risk. But this has been a sort of black box that has been difficult to see how far it reaches out in terms of its tentacles.”

Worldwide IT spending was originally forecast to grow by just over 5 percent this year, according to IDC, as strong PC sales in the fourth quarter gave way to smartphone upgrade cycle driven by 5G and an uptick in service provider infrastructure spending. Additionally, IDC saw momentum in digital transformation projects that ensured strong demand for software and IT services.

IDC said lowering its IT spending forecast from 5 percent to 1 percent is a “pessimistic scenario” not a “worst-case scenario.”

“Things are moving so quickly that we need to constantly recalibrate our assumptions and expectations, but the pessimistic scenario reflects an IT market in which weaker economic growth translates into weaker business and consumer spending across all technologies over the next few quarters,” said IDC’s Minton.

The coronavirus has dramatically affected the IT world – from component shortages, stock market plummets and vendor sales drops to the canceling of major conferences across the globe.

Many IT vendors, partners and customers have restricted travel, switching from in-person meetings and briefings to virtual videoconference meetings.

“We are resilient, and our customers are resilient,” said PKA’s Cohen. “This is horrible and terrible, but you have to get up every morning and live your life. We are moving forward and finding alternative ways to do our jobs.”

Back to Top

Video

 

sponsored resources