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Predicting the unpredictable: COVID-19 is changing the IT devices business

The devices business is sensitive to how and where people work, communicate and play

The COVID-19 crisis is changing how and where people work and how they spend their free time, all of which directly affects the PC business, adjacent devices and services businesses, in addition to networks, data centers and cloud businesses. Many of these changes are opportunities for device vendors, but the global recession, and buyers’ conservatism in the face of uncertainty, will negatively impact vendors until a recovery is underway. The novel coronavirus illness and consequent control measures are influencing the supply and delivery chains as well as sales and servicing processes. Even after recovery from both the pandemic and the recession, some of the changes in working patterns are likely to be permanent as institutions and people find benefits in remote work, accelerating and institutionalizing a growing trend. Similarly, the movement toward using technology to improve health and healthcare is being greatly accelerated by the crisis.

The global crisis has many moving parts, all affecting devices and how they are used

There are several different components to the changes brought about by the COVID-19 pandemic.

  • The illness itself is changing the lives of many people and directly affecting the global workforce as people become ill and others are caring for them.
  • The measures taken to slow the spread of the disease are drastically reducing economic activity, and devices sales are closely tied to economic activity.
  • Most importantly for the devices business, many more people are working remotely and many are relying more heavily on home-based communication and entertainment.
  • The implosion of the travel and hospitality businesses, as well as other personal services and retail businesses, is causing a rapid decrease in global economic activity, exacerbated by the downstream consequences of direct impacts to business.
  • It is possible that the virus and its mutations will impose a long-lasting threat, resulting in long-term changes to patterns of living and working.
  • Some of the changes brought about by the pandemic are accelerations of existing trends, such as working remotely, adoption of cloud-based solutions, and telemedicine; as such, these will remain in place after the crisis subsides.
  • The severity and the duration of the current crisis is indeterminate, undoubtedly leading to long-term consequences.
  • It is likely that as some geographic areas recover, other areas, especially rural areas, will experience new pandemic-based limitations on social interaction.

The end of ‘digital’

Insights from TBR’s 2020 Services Predictions

A potential global economic slowdown has management consultancies and IT services vendors considering how they must reshape their strategies if and when clients backpedal on spending for digital transformation. Reassessing partnerships and seeking acquisitions will be one approach. Selling products, integrated solutions and software more aggressively will be another. And in 2020, at least one IT services vendor or management consultancy will declare the death of the term digital, arguing that everything every enterprise does has become digital.

Join Patrick Heffernan, Boz Hristov, Kevin Collupy and Kelly Lesiczka as they review developments in the IT services and professional services market from 2019 and expectations for 2020.

Don’t miss:

  • IT services vendors’ reactions and strategic shifts as enterprises slow spending
  • The acceleration around products, platforms and SaaS delivered by consultancies
  • The disappearance of “digital” as a marketing term and the rise of post-digital services

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

TBR 2020 Services Predictions: Everything is up for grabs

With or without chaos, 2020 will be a turning point

TBR’s 2020 predictions for the IT services vendors and management consultancies we cover center on a potential external disruptive force, ongoing internal changes, and a market shift that will happen regardless. If a global economic slowdown occurs in 2020, changes to the consulting business model will accelerate. Either way, the term digital as we know it will disappear.

While TBR is not forecasting a recession, either globally or in specific markets, like the U.S., we have had extensive discussions with leaders at IT services vendors and consultancies who have been preparing their teams and their clients for that possibility. As a result, these firms are at an advantage and have been cementing their relationships with clients worried about funding what they’ve been told are necessary digital transformations. In contrast, other IT services vendors have been projecting growth without preparing their own people or finances for a substantial slowdown in IT buying.

At the same time, consultancies have been struggling with significant shifts in how they build capabilities along with selecting services and how to deliver them. As we move into 2020, a well-established resistance to selling software — or be in the products business, in general — will give way to the inevitable rise of software licensing and “as a Service” models, as well as solutions bundling and clearly defined product sets that consultancies now package and deliver. While these products are not completely stand-alone and remain subject to internal debate over the specifics of commercial arrangements, the clear result will be a shift in the consulting model from people to people-enhanced-by-products. And a global economic slowdown would force consultancies and IT services vendors to automate themselves further and adopt new business models, accelerating these changes.

Whether a recession strikes or consultancies evolve quickly or more slowly, TBR expects 2020 will mark the first time an IT services vendor or consultancy declares “digital” has outlived its usefulness as a delineation between various elements of technology and business. Everything will be digital, making a digital designation obsolete. For TBR’s purpose — understanding professional services vendors’ strategies and how they make money — the shift from digital as a label will impact how vendors report their earnings, how they describe their investments, and what kinds of alliances they create across the broader technology ecosystem. In the short term, most vendors will continue reporting, marketing, investing in and adhering to digital. In the longer term, the term is dead.

2020 Predictions:

  • A correction or recession will stall digital transformations and slow growth for IT services vendors and consultancies
  • Consultancies will sell more products and will emphasize and invest more in that part of their business
  • ‘Digital’ will disappear

Register for TBR’s 2020 Services Predictions webinar, The end of ‘digital,’ Jan. 22, 2020.

Technology Business Research 2020 Predictions is a special series examining market trends and business changes in key markets. Covered segments include telecom, cloud & software, devices & commercial IoT, data center, and services.