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 Channel Futures

Channel Research


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Channel Futures’ 2023 Hardware Outlook: ESG Takes Priority Amid Economic Weight

  • Written by Jeffrey Schwartz
  • December 21, 2022
As new hardware designs appear, demand will vary but the economy will pressure all segments.

Demand for client computing hardware and data center infrastructure in 2023 will likely continue moving in opposite directions. However, growth will depend on the state of supply chains and the ability of suppliers to navigate continued anticipated disruptions.

This year, semiconductor manufacturers made significant moves to reduce their reliance on China by expanding into North America. But it will be years before those facilities are fully operational. Meanwhile, the recent abrupt shift by China’s government from its “Zero COVID” policy could create continued supply chain disruptions.

Supply chain disruptions are one of several factors that have fueled inflation this year. Also driving inflation are rising interest rates and the Ukraine war, all poised to weigh on the economy next year. According to a recent survey of 830 CIOs, three-quarters believe we are in a recession or one is imminent.

The statistics varied depending on the region. In the U.S., 40% of CIOs said we are in a mild recession, but it will be short-lived. CIOs in Europe believe a recession is imminent but that it will be moderate or severe. In Asia, CIOs don’t think there is a recession, but a mild or moderate one is likely in 2023.

IDC's Rick Villars

IDC’s Rick Villars

“The challenge for the IT industry is that in this space, perception is reality. CIOs today are starting to plan and think that their companies are going to be in a recession, and they need to start making their investment and technology plans based on that assumption,” said IDC analyst Rick Villars, speaking during a webinar.

As-a-Service Impact

However, unlike previous economic downturns, Villars noted there’s a new factor.

“We are actually now in the first recession of the as-a-service era,” he said. “Over a third of all global IT spending is as a service.”

During the last prolonged recession over a decade ago, customers predominantly purchased IT hardware as capital expenses.

“This new way that you are consuming services is changing all the rules,” Villars said. “Now we see CIOs saying, ‘We know we’re not going to get that sort of short-term capital savings; we have to focus on long-term operational improvements.”

Consequently, instead of making random IT spending cuts, Villars said CIOs will prioritize their budgets on IT projects that provide business value over the next 12 months. Villars added: “Rather than just random cuts in different budgets, networking versus compute versus ERP, it’ll be about what projects are going to give us the business’s biggest benefit.”

In the slideshow above, we share various predictions for PCs, mobile devices, servers and other enterprise hardware.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Jeffrey Schwartz or connect with him on LinkedIn.

 

Tags: VARs/SIs Artificial Intelligence Best Practices Channel Research Cloud Data Centers Desktop EMEA Galleries Intelligence Mobility & Wireless Regulation & Compliance Strategy

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