Andrew Bartels, Forrester VP and principal analyst and author of “US Tech Market Outlook for 2020 and 2021” has revised some of his projections. He is not as pessimistic as he was in August, and instead of the 6.3% decline in tech budgets for 2020, he’s predicting a 2.5% drop for 2020 and another 0.4% for 2021.
Why the change? Quoting CIO Dive “Forrester’s August forecast was off is the recession has “very, very narrowly focused on sectors of the economy that don’t spend a lot on technology,” Bartels said. That includes restaurants, spas and salons, fitness studios and hotels that only make up about 10% of the technology market.
“In past recessions, financial services has always gotten killed because it’s a financial related downturn,” he said. That hasn’t happened this time, and job numbers in that sector have mostly stayed the same.”
Also of note – professional services, including small law and accounting firms, are still vulnerable because of the impact if their clients go out of business.
Why do we care?
This reinforces the guidance I’ve been issuing for months now – the key to understanding the current climate is digging specifically into the markets your customers serve. This isn’t a capital driven recession, instead one with industry specific sets of impact.
Individual technology companies are going to be hit with different levels of impact entirely based on the industries they serve. Your performance may vary or Objects in mirror may be closer than they appear. I’m working on my 2021 predictions, and this data is fueling some of that thinking.