Inflation Impact on IT Spending and Pressures Facing the TV & OTT Video Services Market

The economy has been top of mind for most of us in recent weeks, with headlines starting to talk about a potential slowdown or worst, a recession on the horizon. With that in mind, in this edition of the IDC Tech Brief, we want to bring some clarity and perspective on what IDC anticipates for the Canadian tech market in the second half of 2022.

By The Numbers: Inflation Impact on IT Spending in 2022 📈

The latest release of IDC’s Worldwide Black Book (May 2022) reflects IDC’s point of view on how inflationary pressures created by a perfect storm (easing monetary and fiscal policies, supply chain issues, components shortages, and the conflict in Ukraine) will have a definite continuous impact on Canadian IT spending for the second half of 2022.

Here's what to watch for:

• Hardware spending will be impacted the most, as system prices are very sensitive to rising transportation costs and component shortages.
• IT Services, although less impacted than Hardware, is the category that follows real GDP evolution the closest. The impact of inflation should have its impact in 2023.
• Software is the IT category that is poised for the most dynamic growth in 2022. Software is usually more insulated from macroeconomic conditions.

Overall, the Canadian IT spend in 2022 should grow slower than the GDP for the first time since 2010, but when we remove the Hardware category, IT spend should grow almost twice as fast as our GDP, pulled by the growth in both IT services and Software categories of IT spending.

Analyst Spotlight 💡

The Canadian OTT video services market is at yet another fork in the road as consumers reestablish their new everyday lifestyles. The finite consumer wallet is being stretched by an increasingly competitive market among OTT video service providers & record-high inflation.

What does this mean to Canadian service providers? Explore further insights on Canadian consumers preferences in our recent IDC Survey, Canadian Consumer Survey Indicators, 2022: Wireless, Internet, Home Phone, TV, and OTT Video Services

What's New? 🔎

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Upcoming Events

State of the Market Special Edition: Global Recession Scenario

In this special edition of our regular State of the Market webinar, IDC will answer key questions such as:

• What is the likelihood of a downturn in IT spending in the next 12 months?
• Will businesses and consumers be willing to continue increasing their tech spending?
• Which tech vendors are best-positioned to ride out a storm in the next 12 months

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Learn how IDC's unparalleled reach and events can help you hit your lead generation goals before 2022 comes to an end. Get in touch with our Events Team to learn more!

Your June Research Checklist ✔️

• Canadian Consumer TV Services Forecast, 2022–2026. This market is expected to decline at a five-year CAGR of 1.0%, decreasing from a total market revenue of C$7.44 billion in 2021 to C$7.01 billion in 2026.
• Canadian Cybersecurity Market Snapshot, 2Q22. Cisco, Palo Alto Networks, Fortinet, and Microsoft are leading the Canadian security products accounting for a combined share of 26.7% in a C$2.32B market in 2021H2.
• Canadian Server Market Buyer Behaviour: 2Q22. The top 3 market vendors (Dell, HPE, and Lenovo) in terms of overall vendor perception rankings are unchanged over last year.
• Adoption of Unified Communications and Collaboration, 2022. 90% of Canadian organizations plan to use unified communications and collaboration (UC&C) solutions with Microsoft leading the pack of UCaaS primary vendors in Canada.
• IoT Adoption in Canada, 2022 Survey Adoption of IoT solutions by Canadian organizations is far more common than one might expect. Over 3/4 of organizations are using IoT in production right now.

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