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Scores of IT projects face the chop in COVID-19 world

Scores of IT projects face the chop in COVID-19 world

Enterprises to save cash flow by cutting IT costs

Credit: Jason Abdilla

The IT industry is facing a “bleak” few months as enterprises look to “aggressively” cut technology costs in mitigation of the damage wrought by COVID-19.

According to analytics firm GlobalData, companies will axe IT projects throughout the remainder of 2020 and into 2021 as numerous markets face recessions, including Australia.

Meanwhile, the adoption of some technologies – such as edge computing and internet of things (IoT) will be slower than expected, the analyst predicted.

However, from a long-term perspective, the picture looks rosier for IT infrastructure vendors.

According to the firm, data centres, cloud IT and networking to support changing business practices and working from home set-ups will be important, although companies’ short-term focus will be on saving, not spending.

In particular, Amazon, Microsoft, and Google will reap the long-term benefits of this long-term picture, GlobalData claimed. 

“Although IT infrastructure has so far survived the COVID-19 test, customers and vendors should carry out a post-pandemic review to identify and correct any infrastructure failings,” said David Bicknell, principal analyst in the thematic research Team at GlobalData.

“The risk is that, with all companies in survival mode, any necessary fixes will be forgotten until the next crisis comes along. Vendors may want customers to adhere to a lifecycle of planned retirements and upgrades but, in the aftermath of COVID-19, customers will cut costs and rely on what they have.”

He added that vendors whose supply chains were overly reliant on China should take steps to minimise future disruption by adopting a multi-location approach.


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