COVID-19 has led to a Cloud Techno-loution: Edelweiss report

 

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% 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.

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