The Indian IT industry is set to experience a slowdown in terms of discretionary IT spending, contract renewals and new deals getting signed as enterprises recalibrate by cost structure in coming months, an IDC report has said.
According to Sharath Srinivasamurthy, Research Director, Enterprise Solutions and ICT Practices, IDC India, the actual impact of COVID-19 on India market will be evident by middle of 2020.
“Existing project executions have also taken a hit due to travel restrictions in place. IT vendors will be forced to relook at their growth targets for the rest of the year as the impact will become evident in the next few quarters,” Srinivasamurthy said in a statement.
On the other hand, the global health crisis has provided an opportunity to IT vendors to test their resilience on business continuity, remote connectivity, and security as they look at innovative ways to service their clients.
“Enterprises are looking at IT vendors to handhold them in the hour of crisis,” Srinivasamurthy said.
Overall, the growth in global IT spending is expected to reduce by 3-4 per cent by the end of this year, considering ‘pessimistic scenario’ due to the outbreak of Coronavirus disease (COVID-19) pandemic.
The impact might be even more profound as spread seems to engulf many countries beyond China.
However, adoption of collaborative applications, security solutions, Big Data and AI are set to see an increase in the coming days.
“It has also given an opportunity for IT vendors to test some concepts of ‘Future of Work’ and some of them might become mainstream as the dust settles,’ said the IDC report.
While work from home is not a new concept for Indian corporates, it certainly is a testing time to see the success at this scale.
Enterprises are also exploring ways of working together that leverages conversations, meetings, and assets across platforms with employees working remotely from wherever they are located to serve customers better and ensure business continuity, the report noted.
IT vendors are working with clients to get special approvals and SLA (service-level agreement) holidays, wherever needed, to have employees connect remotely to continue providing services especially in supporting mission-critical IT systems.
“IT vendors should look at offering incentives on the existing contract extensions and also build conversations on business continuity and disaster recovery in the cloud,” the report suggested.
IT vendors should also keep an eye on emerging uses cases in AI for disease detection, tracking, and prevention.