Kathy Gibson reports from the virtual IDC CIO Summit – The world has largely weathered the Covid-19 storm and is ready to start feeling its way to the new normal.
That’s the word from Crawford Del Prete, president of IDC, who believes that organisations are now looking to the future and planning their investments around recovery and growth.
We were all taken by surprise when the pandemic struck, he says, and every organisation had to find its own way through the crisis.
“No amount of planning can help a company deal with a pandemic,” he says. “We are in uncharted waters in terms of how each company deals with the situation.”
The IT industry – along with just about every other sector – saw an immediate and dramatic drop-off in spending from February and companies moved from an offensive to defensive posture. “They were looking to survive and control costs,” Del Prete says.
“People were struggling to get their heads around what has happened. No-one has seen a situation like this, and for a moment, the world kind of stopped and then picked up again.”
But organisations will recover, he says, although there is no firm timeline around when that will happen.
IDC believes there are five cycles that businesses will progress through on the road to recovery. They are business continuity, cost optimisation, business resilience, targeted investments and the future enterprise. These match up to stages that the economy is going through: Covid-19 crisis, economic slowdown, recession, return to growth and finally the new normal.
“We are now moving into the time of recession, and we think companies will spend where necessary but flatten the depth before they return to growth with targeted investments. We will then move into a new normal that we are only beginning to understand.
“Even though we believe this new normal won’t emerge in any form until the beginning of 2021 , we can safely say we are at the end of the beginning. So investments you make now are important to how your company can return to growth and move forward.”
IDC has been doing a pulse survey every two weeks, and is seeing signs of recovery in the Asia-Pacific region where the virus stuck first. “While we are not back to where we were in January, we are seeing recovery. There are some optimistic signs, for instance domestic travel has resumed in China; and there has been great progress in Australia and New Zealand.”
Europe is starting to make positive progress, he says. After aggressive lockdowns in April, markets are now starting to open up more.
“The US is struggling with overall business confidence,” Del Prete adds. “This is because we are still seeing widespread infection rates in cities and rural areas.
“But overall the world is starting to tick back and make progress, and we think it will steadily improve.”
IT organisations have changed their investment plans as a result of the pandemic. IDC finds that three-quarters of IT roadmaps are changing.
“People are focusing on projects that can generate a return,” Del Prete explains.
Encouragingly, just 5% of companies are cancelling projects outright, while more than half are investing in new projects going forward.
“You need to think how to pivot in these times to take advantage of new tools. There is significant interest from organisations to use the crisis to invest in taking market share in their respective markets.”
In terms of projects they are focusing on, IDC sees that companies are resetting to the things that matter most, investing in business resilience, customer experience and data insights.
Del Prete says IT organisations need to focus on maintaining choice, control and a measure of comfort with the technology.
“Choice gives optionality and customers want the choice. Organisations that have flexible vendor support, flexible ways to buy, and vendors that support industry standards – that gives customers a lot of choice,” Del Prete says.
“In terms of control, this refers to the things that an organisation cannot control, with open tools and open standards.”
Currently, we are seeing a flight to safety, where organisations want to feel comfortable that they are buying into the long term, and that what they invest in today can integrate easily and drive next-generation innovation.
As we move into the new normal, there will be three control planes that IT organisations will focus on, Del Prete says.
Tee workload control plane will help customers optimise performance, with a high degree resilience and visibility.
Enterprise control plane speaks to the future of applications, AI, the future of operations and the applications that support them. IT needs to ensure that customers get visibility into how they can build and measure resilient operations and applications.
“We think customers will increasingly look to the ecosystem control plane,” Del Prete adds. “This is about being responsible, open, socially responsible, and with a level of trust that users are comfortable with.”
Del Prete stresses that different markets and organisations are at different stages of recovery, but overall we are the end of the beginning and should start thinking about targeted investments that will support the new normal.
“The process will be uneven, but the companies that are using the time to invest will be handsomely rewarded.”