Growth in global IT spending may fall by 2020-end but presents opportunities for IT cos, says IDC

New Delhi, Apr 1 () Growth in global IT spending is expected to reduce by 3-4 per cent by the end of 2020 due to the coronavirus pandemic, but it also presents an opportunity to IT vendors to step-up as consulting partners for their clients, research firm IDC said on Wednesday.

IDC said while the major impact is expected to be on hardware business, the software and services businesses are also expected to slow down.

"However, adoption of collaborative applications, security solutions, Big Data and AI are set to see an increase in the coming days. It has also given an opportunity for IT vendors to test some concepts of 'Future of Work' and some of them might become mainstream as the dust settles," IDC noted.

It also provides an opportunity to IT vendors to step-up as consulting partners to hand-hold their clients in helping them sail through the crisis, it added. Advertisement

"While the actual impact of COVID-19 on India market will be evident by middle of 2020, we expect a slowdown in terms of discretionary IT spending, contract renewals and new deals getting signed as enterprises recalibrate by cost structure in coming months.

"Existing project executions have also taken a hit due to travel restrictions in place," IDC India Research Director Enterprise Solutions and ICT Practices Sharath Srinivasamurthy said.

He added that IT vendors will be forced to relook at their growth targets for the rest of the year as the impact will become evident in the next few quarters.
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"On the other hand, it has provided an opportunity to IT vendors to test their resilience on business continuity, remote connectivity, and security as they look at innovative ways to service their clients. Enterprises are looking at IT vendors to handhold them in the hour of crisis," he said.

IDC pointed out that corporates across the country are implementing alternative ways of working, which is generating a parallel corporate line that demands to be connected from where they want, when they want and to who they want. "While work from home is not a new concept for Indian corporates, it certainly is a testing time to see the success at this scale. Advertisement

"Enterprises are also exploring ways of working together that leverages conversations, meetings, and assets across platforms with employees working remotely from wherever they are located to serve customers better and ensure business continuity," it said.

IDC expects the adoption of collaborative applications growing at a rapid pace after the COVID-19 outbreak.

IT vendors are working with clients to get special approvals, wherever needed, to have employees connect remotely to continue providing services especially in supporting mission-critical IT systems. Advertisement

The companies are also expected to pay attention to have necessary 'force majeure' clauses to cover situations like outbreaks in addition to existing clauses around acts of God and natural disasters in their contracts. SR SHW ABMABM
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