Markets and Trends

COVID-19 Poses a Mix of Challenges and Opportunities for IT Vendors

Explore the challenges that IT vendors need to overcome & the opportunities to support their business partners through COVID-19 with Sharath Srinivasamurthy.
Pinterest LinkedIn Tumblr

Growth in global IT spending is expected to reduce by 2.7%, compared with the estimated growth rate of 5.1% by the end of 2020, because of the “pessimistic scenario” that resulted from the COVID-19 outbreak. Most impact is expected to be on the hardware business, but both software and services businesses are also expected to slow down as COVID-19’s spread goes beyond Asia. While the impact on IT spending will be significant and IT vendors are relooking at the outlook for rest of the year, there are opportunities to try new ways of servicing clients and build new capabilities.

Opportunity: Enable Remote Work

Although working from home is not a new concept for corporations, the current situation is certainly a challenging time to see success at this scale. IT vendors should carefully analyze the effectiveness of work from home and if feasible, continue the initiative post crisis in order to keep employees motivated and provide them a good work-life balance.

IDC sees collaboration as one of the key elements of a digital workplace. Hence, with home offices as the major channel to deliver services, organizations must ensure on- and offsite presence at all times for zero disruption to the business. VPNs, collaboration suites, end-point encryption, and cloud tools are all required to make this possible. IDC expects adoption of collaborative solutions to increase significantly during this period and recommends continued adoption to increase operational efficiency. IT vendors should look at stepping-up their capabilities on workplace and mobility technologies.

Challenge: Cyber Security Vulnerabilities

IDC expects that the adoption of the zero-trust policy will increase in the months ahead, as more people connect to work from personal networks. Unsecured home networks are actively targeted to hack into their systems and steal confidential data and credentials. IDC recommends that organizations keep their VPNs and firewalls updated with security patches in place and notify team members about the latest cyberattack trends, so that they can carefully detect any kind of scam mails or phishing attacks and avoid breaches. Enterprises should also work closely with their information security partners to evaluate the situation and consider robust security solutions to safeguard their data, systems, and infrastructure.

Opportunity: Enterprise Intelligence Drives Innovation

Big data and AI can be utilized in identifying patterns and intelligent contact tracing done with the large data sets from currently affected individuals. Although delivering intelligent insights at scale is still farfetched notion, AI and advanced analytics can be leveraged to accelerate the discovery and development of new drugs to combat the pandemic. Consequently, IT vendors should focus on building and improving AI and big data capabilities as new challenges and use cases emerge.

IT vendors should work with clients to get special approvals, if needed, to have employees connect remotely to continue providing services, especially mission-critical IT systems support. They should also negotiate relaxations on service-level agreements (SLAs), particularly those that require engineers to be physically present to fix issues. Moreover, IT vendors should focus on having necessary force majeure clauses in their contracts to cover situations such as outbreaks, adding them to existing clauses about acts of God and natural disasters.

As business continuity becomes the need of the hour, it then provides a chance for IT vendors to become partners of choice. As enterprises become aware of the dynamic business risks, they need help with establishing a firm risk posture in people, processes, and technology. In addition, vendors should also look at offering incentives on existing contract extensions and build conversations on business continuity and disaster recovery using cloud. Ultimately, although IDC expects a challenging period ahead for IT vendors, this period also opens an opportunity for these vendors to hold their clients’ hand in the hour of crisis as trusted partners, helping them navigate the situation.

The coronavirus (COVID-19) pandemic is impacting the global economy at nearly every level. Anticipate market challenges and keep business moving with IDC’s extensive COVID-19 research and advice.

Sharath Srinivasamurthy

Research Director, IDC India Enterprise Solutions & ICT Practices