2020 has been a year that many of us can’t wait to put behind us. COVID-19 has turned lives upside down from a loss of life to loss of income. The World Bank expects the global economy to shrink by 5.3% this year. In the first two quarters of 2020, the European economy has shrunk by 12.1%. COVID-19 has left a path of destruction that no country was ready for.
The outlook is grim for many businesses. You may think that the IT industry escaped this. The need for remote work has forced companies to invest in their digital infrastructure from employee laptops to increased network security. But the bubble may well burst for IT too. How you react to COVID-19 will set your reputation for years to come. It may even determine whether your business succeeds or fails.
According to the IDC survey from March 2020, 70% of business are revising their technology-led projects to drive efficiency and increase ROI. These revisions can be seen in three core areas:
- Reassessing investments to decide how processes can become more efficient and at the same time, lower expenses.
- Reevaluate the use of current resources and technology, allocating a company’s resources to where they are needed most.
- Continuing with projects that deliver the highest or most consistent ROI, those projects that allow for a business to ‘stay afloat’ in the short-term.
The IT Market in Europe at Present
From 2020 to at least 2022, experts predict a sharp fall in spending on IT services, hardware, and software. Project outsourcing is going to take the largest hit, more so that recurring services.
When looking at traditional on-site applications software, the limited short-term ROI will restrict the spending in this area. However, companies are also aware that automated processes, financial planning, and forecasting (with the use of big data and machine learning) will be essential if a company is to survive the impacts of COVID-19 and recover. Remote work now requires more online collaboration and cloud solutions (IaaS and PaaS). As educational institutes begin to reopen, more and more learning will be moved online, much as the growing need for telemedicine. The demand for such tools and platforms will remain strong.
The problem with hardware is that so many parts are made in China. The disruption to the European supply has caused a large shortage, especially for servers and storage devices. In such a short period, the ODM market (Original Design Manufacturer) has gone from having an oversupply to a shortage.
What Can Technology Vendors Do?
While it is difficult not to panic, the first thing to do is realize that there are proactive steps you can take to maintain a positive reputation and even grow, despite the challenges of COVID-19.
- Offer your customers valuable advice on how they can dedicate themselves to products that concentrate on ROI. Highlight financial value and business outcomes of their existing and new projects.
- Many customers are not aware of the IT potential available to them. Explain how extending their infrastructure with new digital solutions can allow them to connect the whole value chain and therefore maximizing its potential.
- Join the Coronakindness movement. It doesn’t sound like much but being understanding in these turbulent times can generate massive customer loyalty. Look to see if there are free solutions or freemium services that will help your customers. Don’t stop there. Look for ways that you can help your employees, the local community, and society as a whole. Acts of kindness will improve your brand awareness; people will remember you and come back to you.