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COVID-19 Lockdowns Threaten the IT Services Sector More than Expected

Many may think that the IT services industry will be unaffected by the spread of the SARS-COV-II virus since most information technology services are conducted or delivered online. This perceived veil of invulnerability, though, is remotely realistic. According to industry analysts, the impact of drastic solutions is likely to be immediate, deep, and long-lasting. The

Many may think that the IT services industry will be unaffected by the spread of the SARS-COV-II virus since most information technology services are conducted or delivered online. This perceived veil of invulnerability, though, is remotely realistic. According to industry analysts, the impact of drastic solutions is likely to be immediate, deep, and long-lasting.

The IT services sector is facing a bleak outlook. Researchers at Global Data reveal it is this segment of the IT industry that will be hit the hardest by measures to control the COVID-19 pandemic. Lockdowns and other government-imposed strategies will weigh heavily on companies that provide services such as tech support, network administration, media services, communications, data processing, data storage, information security, and business processes.

Analysts say that optimism for IT services is minimal as companies shut down operations. Automation and artificial intelligence may be on the rise, but most IT companies still require people to operate. Providers of IT solutions like Omicron Solutions Ltd, for example, provide services that may not require need human involvement. However, most of their services, especially the managed IT solutions, require people who may not function as effectively under a remote work setup.

Businesses that turn to telecommuting or work-from-home arrangements will likely encounter significant issues according to analysts. The potential problems can be due to the need for appropriate equipment, which may not be available at the homes of teleworking employees. Difficulties may also arise as more people and businesses significantly increase their internet usage. Overloading can overwhelm limited infrastructure capacities, which can result in disconnections or unreliable internet connectivity.

Even the application development sector is set for a rough ride. Analysts say that the growth of app or software development is at the mercy of the global economy. The demand for apps nosedives as the world’s economic activities grind to a halt with all the lockdowns happening everywhere. With freefalling demand, developers are likely to face mass layoffs. Freelancers will be competing for limited potential clients.

The IT industries worldwide are expected to report dramatically lower revenues, and many will likely experience contractions. According to the Global Data researchers, numerous IT projects are expected to be shelved until 2021 based on optimistic projections. Analysts warn software vendors that it will be a tough year ahead, as very few net new business will be generated before the last quarter of the present year.

Cloud service providers may benefit from the increasing demand for cloud solutions, but it will be for a limited period. If the pandemic problem drags on for a few more quarters, everything in the IT industry will ultimately suffer the adverse consequences. Clients of cloud companies will eventually have to cease operations, which means they will also have to discontinue availing of such services.

The COVID-19 problem affects everyone, even those who have the option to continue doing business online. It’s not a simple health scare that will go away on its own. The viable solutions available at present threaten all industries, including IT services, so it’s urgent to solve it at the soonest possible time.

 

Image:https://pixabay.com/photos/smart-city-communication-network-4168483/

Susan E. Lopez
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