When all the data is available, it is likely we will find that the Covid-19 related work-from-home and other measures reduced global service provider revenues a couple of percentage points, though some firms might have seen far-worse hits, and some see higher revenues.
Overall, full-year global results might show less than one percentage slippage of service provider revenue, IDC predicts.
And in many cases, it will be hard to separate specific Covid-19 impact from the underlying trend of declining growth. Something similar might happen for information technology spending, even for cloud services which have been on a steady growth path.
Though it might seem obvious that information technology executives increased cloud computing spend to support remote workers during the Covid-19 pandemic, it is not yet so clear how much spending actually might have changed. It is possible we might actually see spending fairly close to what had been predicted prior to the pandemic.
An October 2020 survey of 230 information technology professionals by OpsRamp finds 60 percent of firms increased IT budgets while 22 percent reduced spending in the second and third quarters of 2020. Some 63 percent of respondents reported accelerated or maintained digital transformation initiatives because of Covid-19.
The survey included IT professionals in the United States and United Kingdom working for firms with at least 500 employees and $5 million in annual IT budgets.
Reported priorities for IT leaders included information security and compliance (59 percent), remote work and collaboration (55 percent), public and multi-cloud infrastructure (50 percent) and monitoring and management (42 percent).
Among capabilities acquired were artificial intelligence for IT operations (57 percent); digital experience monitoring (50 percent) and network performance monitoring and diagnostics (50 percent).
A Computer Economics survey in August and September 2020 finds a split pattern of information technology operations spending: 30 percent increasing spending while 29 percent were decreasing. About 41 percent of respondents say there has been no change in spending.
Back in April and May 2020, 41 percent of respondents reported unchanged spending. But 30 percent already had made moves to reduce IT budgets in response to To the extent there had Covid-19 work from home rules.
The 30 percent of respondents who reported cutting spending seems not to have budged much. In the fall, the percentage of respondents reporting lower spending was still 29 percent, substantially the same as the 30 percent who reported cuts in April and May 2020.
What changed was the percentage of respondent firms that boosted spending, probably for hardware, software or services related to supporting remote workers. “Of course, the big reason for increasing budgets is to respond to the increased need for employees to work from home,” said David Wagner, Computer Economics senior research director.
It is hard to separate out the response to Covid-19 remote work on cloud computing, which has been growing robustly before the work-from-home mandates were imposed. And even some firms that one might assume boosted cloud spending to support at-home workers eventually reduced spending from surge levels.
Some studies suggest cloud revenue growth from 2020 to 2021 will be about 12.5 percent, perhaps lower than many would have expected, even under normal circumstances. The only issue is whether the work-from-home rules affected cloud computing uptake rates. And that might ultimately be a different matter from earlier expectations that cloud computing among smaller businesses, for example, would increase because of the pandemic.
To some degree, the changes might hinge on whether customers are active about turning off or reducing payment for unused cloud services. It also will matter how much aggregate demand changed when workers shifted from offices to homes. In principle, that might have shifted the location of consumption, but not the volume of use.
Though early in the pandemic many expected increased reliance on cloud computing, beyond growth already expected, we will have to wait and see what actually transpired. Covid impact might ultimately turn out to have been less of a change inducer than we expected.
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