Impact of COVID-19 on the IT Sector

Impact of COVID-19 on the IT Sector

COVID-19 is a disease caused by a large family of viruses called coronavirus. This disease can cause illness in humans and animals. Elderly people who have other problems like diabetes, cancer, chronic respiratory disease, and cardiovascular disease are more likely to develop severe illness. This disease does not require any special treatment and people with mild to moderate respiratory illness will recover.

Communicating in ways that build trust, maintain or restore trust between the public and outbreak managers so that people can believe in health information that is communicated by the health authorities. Withholding information can cause the information to seem more frightening so we must announce early and the new information is revealed carefully. It is also important that the voice of the public is heard and information is shared with proper planning which must translate into action.

A cluster of cases of pneumonia in Wuhan was reported on 31/12/2020. An Incident Management Support Team was set up across three levels of the organization: headquarters, regional headquarters, and country-level on 01/01/2020. WHO later released a technical publication that contained a risk assessment and advice which was later issued with guidance to other countries. After field visits to Wuhan WHO stated that the virus spread from human to human. By March, there were alarming levels of inaction, and WHO characterized COVID-19 as a pandemic.

Many companies started to move into the hybrid-cloud approach as it serves as an interim step in the long process of digital transformation. Also, multi-cloud solutions are being adopted by various providers. Also, the cloud-based solutions should be providing the path for AI capabilities. With an increase in IoT devices, the time is right for edge computing to experience significant growth across industries like manufacturing, health care, retail, energy, logistics, agriculture, and financial services.

In COVID-19 times, the chances of keeping the staff can be based on client needs, skill requirements, and financial health of the company. The flexible staff could be the first to get laid off but few experts believe that they may have an advantage as they come with a variable cost structure and minimal compliance requirements. The PMI index has fallen from 50.6 in March to 57.6 in February.

There has been a potential impact on technology which can be categorized as:

  1. The launch of new smartphones may be deferred and companies are finding it difficult to get production full and running.
  2. Even though the demand for hardware is less, the software is helping the industry to stay afloat. Remote working technologies are seeing a huge growth and company spending on security software is growing.
  3. Continued demand for cloud infrastructure services and the IT department will play a huge role in the Business-Continuity plan and will need huge help.
  4. Schools are moving to online classes and there is an increased demand for specialized software.

The time is key for Sales professionals to bring in new customers on board, no matter how small the sale is. Diversify your clientele, and sell to the sector having windfall now, telecom, insurance, pharma, and OTT. Engaging your existing clients by retaining them and investing in their success by providing them tools to meet that, then it’s a win-win situation.

The big companies can cut jobs for the following reasons:

  1. Many companies have money to pay.
  2. The companies do not want their regular and permanent employees to go as long as they have sufficient flexibility in their books.

In the long run, the companies might consider not giving subsidies to the employees. Startups might face severe heat as the VC might not pay salaries. There will be demand shrinkage for the IT industry as the entire world is under stress.

The global IT industry spend is set to decline by 2.7 percent in 2020 compared to previous years. All the IT companies that provide services to travel and hospitality verticals have seen a decline in revenues. The companies are planning on postponing the spending on new technologies. Things getting postponed and the chances of the ongoing process getting hit are less, but things may get postponed in discretionary spending or new projects.

The first half of the COVID-19 scenario is going to be a washout for every economy and the rebound is going to take place in the second half. There needs to be establishments of alternative supply chains and work from home provisions for employees. COVID-19 is bringing the economic globalization to the brink of collapse and could fundamentally change the way for everything. There could be three scenarios in which things might operate: localization, regionalization, and globalization which could change the entire way we work in the long run.