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Tag: COVID19

  • Coronavirus Economic Shutdown: Analysts Hit the Brakes on Global IT Spending Estimates

    Coronavirus Economic Shutdown: Analysts Hit the Brakes on Global IT Spending Estimates

    By most accounts, 2020 was set to be a pretty good year for U.S. gross domestic product and enterprise IT budgets. That was before the novel coronavirus, and the subsequent economic shutdown that is designed to blunt its spread and avoid overwhelming the nation’s health system. Analysts are now slashing their economic growth rates and enterprise technology spending estimates.

    Previously, research firm IDC estimated that real GDP in the U.S. would reach 2.4%, but downshifted that to a “pessimistic scenario” of 1.4%. While IT spending dropped from an expected 5.1% year over year growth to a pessimistic scenario of 1.3%. The base scenario for GDP growth is now 2.0% and for IT spending 4.3%.

    “The pessimistic scenario is not a worst-case scenario,” said Stephen Minton, vice president in IDC’s Customer Insights & Analysis group. “Things are moving so quickly that we need to constantly recalibrate our assumptions and expectations, but the pessimistic scenario reflects an IT market in which weaker economic growth translates into weaker business and consumer spending across all technologies over the next few quarters. Things could get worse, but hopefully not.”

    Earlier this month, Forrester analyst Andrew Bartels wrote in this post that the U.S. and global technology market spend will slow to 2% this year.

    “That assumes the U.S. and other major economies have declined in the first half of 2020 but manage to recover in the second half. There is also a 50% probability that U.S. and global tech markets will decline by 2% or more in 2020 if a full-fledged recession hits,” Bartels wrote.

    Not all areas in technology will be impacted equally. Forrester expects there will increased demand for cloud infrastructure services, specialized software, communications equipment and telecom services for remote work and education.

    However, Forrester expects computer and communications equipment to potentially decline 5% to 10%, while technology consulting and systems integration services spending could be flat to down 5%, should companies really belt-tighten.

    “Software spending growth will slow to the 2% to 4% range in the best case and will post no growth in the worst case of a recession. Tech outsourcing and telecom services will hold up better, though contract revisions could cause spending to go down, as well,” stated Bartels.

    S&P Global Ratings also predicts slowing IT spend. According to its update, Global IT Spending Set To Slide As Coronavirus Hits Hardware Sales, S&P Global economists cut their global GDP growth rate by more than half to 1% to 1.5% from 2.8%—in just two weeks.

    “We believe the spread of the coronavirus will hurt enterprise and consumer IT spending across the globe with particularly bleak ramifications for the hardware and semiconductor segments. However, we expect some of the deferred spending to return gradually in the latter half of this year through heavy government stimulus in the U.S., China, and elsewhere,” wrote S&P Global Rating Analyst Andrew Chang.

    S&P Global Ratings anticipates IT spending to decline 3% year over year, compared their prior estimate of 2% to 3% growth. S&P Global Ratings expects some of the biggest hits to hardware, with smartphone revenue falling to negative 9% from up to 2% growth, and PCs to negative 9% from a previous range of negative 3% to a positive 4% growth.

    While enterprise technology budgets are being slashed, the need for business-technology isn’t going away. In fact, it’s accelerating as more knowledge workers shift to working from home, more remote collaboration and keeping legacy systems running and moving forward with digital transformation efforts.

    — George V. Hulme

  • COVID-19: Don’t Sacrifice DevOps

    COVID-19: Don’t Sacrifice DevOps

    Like everyone else, I’ve been following COVID-19/Coronavirus issues. My focus is more on the IT impact of the disease and its status as a pandemic.

    Let’s start by saying it isn’t the end of the world. Yes, it’s serious. Yes, it will be disruptive. Yes, those impacted by the worst aspects of the disease will leave a hole. But when it is over, and the tide has swept by, the vast majority of people will still be here, still trying to do what they need to do.

    That includes ITOps/DevOps maintaining whatever you put in during the rush to work remotely. Some organizations will be happy to throw something up and then rip it back down, but most will not. Once they’ve worked out how to work remotely, they’ll want to keep that as an option. Some to offer more work/life balance to employees, others to have a backup plan in case of emergency. Ask any company in Katrina’s path, remote work plans born in emergencies tend to hang around.

    It is the nature of DevOps to be nimble and reactive, planning on improving things as time goes on. That’s a good feature of both DevOps and modern IT teams. But some things are less nimble than others, and the rush to remote work is going to show that in a hard way.

    The VPN chosen or expanded to enable remote workers is not likely to be swapped out easily or quickly. While there is a sense of urgency—if you follow /r/sysadmin or to a lesser extent, /r/DevOps on Reddit, you know that urgency may even be too gentle a word. Some management teams seem to be in panic mode—you are going to have to live with some of these choices for a while, don’t make them knee-jerk.

    Normally, an MSP is your friend when moving like this, offering expertise and knowledge your organization doesn’t have internally, and shortening both deployment and the learning curve. But consensus is that MSPs, laptop manufacturers and VPN vendors are going to be booked solid for the near term.

    So, choose software when you can. Not because software is better (truly for some functions it is worse), but because it is generally easier to replace. A software VPN can be expensive, but you’re not buying hardware that is a sunk cost. Consider short-term solutions such as Amazon Workspaces or possibly  Chrome Remote Desktop, old standbys like VNC or RDP (likely with VPN in both cases), file sharing with things such as Sharepoint or OneDrive. Later on, you can look at a Cloud NAS such as Nasuni, or a more solid remote access plan.

    Yes, all the suggestions above have things you need to worry about. No, not everything will be within your control. However, these things are easier to rectify on iteration than “We bought big solution X, and it doesn’t do Y, so we need to replace it.” Start with short-term solutions and improve them as you go–this is truly the DevOps way, but it is easy to lose as you’re looking for high-volume, perfect and urgent.

    IT workloads (particularly operations workloads) are going to increase for any organization that wasn’t already set up for broad remote work. There is no way around this fact. As someone suggested online, “Kiss your family, tell them you’ll see them in a couple months and get to it.”

    You’ve got this. The internet is loaded with information to help, places such as Spiceworks and Reddit have people willing to offer advice all day. Smaller MSPs are likely happy to talk with you as they attempt to grow their business. Determine what you need, how fast you need it and implement the best solution you can in the time available, aiming to improve it on the next iteration. And keep the wheels of business running.

    It’s a flu variant, not the black plague. Businesses that deal with this well will come out well. Right now, “Deal with it well” includes a lot of IT work: from continuity planning, to fast DevOps iterations, to getting people at home productive and supporting them through this.

    — Don Macvittie