According to a report published in by Edelweiss which was worked upon by interacting with people belonging to a technological background stated that the COVID-19 pandemic has led to a boom in the technology industry. There has been a significant rise in online activities.
Most of the companies have shifted to a work from home set up, and schools and colleges adapting to the online setup are also switching to digital mode of payments with a significant rise in the e-commerce sector. There was an increase of 10 per cent in the digital transactions from the pre to post COVID times.
The reason for the rise in the technology spends is because of increased adoption of cloud services across various industries, jump in the tech spends led by BFSI’s renewed propensity to spend spurred by hyper activity from the fintech players, bounce back in manufacturing and product engineering services, retail focusing on core infrastructure and digital. Clients across the board are also increasing tech budgets. There is also an increased urgency to migrate to a cloud.
Most clients are allocating a higher proportion to technology spends than previous years. Besides, their perception of the future use of technology, its adoption and benefits has undergone a meaningful shift. Cloud has clearly taken precedence in spends as clients now increasingly and strongly-than-ever believe that they need agile IT infrastructure to manage variable data loads.
This view is accentuated by the pandemic-led explosion in online activity. Clients have seen an increase in scope of technology adoption across departments and functions post-pandemic, implying much higher adoption of technology.
The biggest beneficiary will be cloud providers as increased data usage will accelerate migration to efficient frontier or Cloud. For example, Microsoft reported a 61 per cent YoY spike in its cloud business in the last reported quarter.
The report also added that there is an increase in the demand for technology as it is becoming mainstream and people have started to acknowledge its relevance of technology in their business, with everything going online there is a faster migration to a cloud.
The current times would prove to be a revolution or ‘Techoloution’ as the report mentions for the IT industry and is said to last for at least five to seven years.
Last but not the least, the COVID-19 pandemic will engineer a structural change in clients’ and service providers’ mindsets to revaluate onsite workforce requirements. This will not only save costs for clients (as onsite billing rates are 3 times offshore rates), but will be also margin-accretive to service providers, although it will entail a somewhat negative impact on revenue growth.
