1. COVID-19 Pandemic Triggers Recession And IT Sales Slowdowns, Forces Millions To Work From Home
The first IT industry-related news stories about the coronavirus focused on the outbreak in China, including Google suspending operations at its offices in China, Amazon restricting business travel to the country and Apple facing iPhone production constraints as manufacturing plants in China shut down.
By mid-February it became clear the impact of the COVID-19 outbreak, although not declared a pandemic until March 11, would reach far beyond China’s borders. The first casualty was the Mobile World Congress 2020 conference in Barcelona, scheduled to begin Feb. 24, which was cancelled on Feb. 12 after a number of major participants like Cisco Systems, Intel, and Sprint dropped out.
From that point just about every IT industry event and conference was canceled and replaced with an online virtual event, including a number of major vendor customer, developer and partner conferences such as HP Inc.’s Reinvent, Google Cloud Next, Dell Technologies World 2020, Amazon’s AWS re:Invent 2020 and Apple’s World Wide Developers Conference.
To halt the spread of the virus many countries around the world – and states within the U.S. – began shutting down their economies and issuing stay-at-home orders. That led to an unprecedented number of businesses ordering their employees to work from home – a change that has had far-reaching consequences for solution providers that have had to quickly pivot and support clients’ employee needs for laptops and other work-from-home equipment such as collaboration tools, video conferencing services and more.
A number of leading IT vendors including Cisco Systems, Hewlett Packard Enterprise, IBM and SAP, took steps to help their channel partners absorb the economic blow from the pandemic by suspending sales targets, providing program level protection, extending deadlines for certification and specialization renewals, and offering generous financing terms, flexibility in using market development funds, and free or subsidized training opportunities.
Some IT vendors have benefited from the increased demand for their products and services generated by the pandemic including laptop computer manufacturers, suppliers of collaboration tools, cloud platform vendors like Microsoft Azure and – most certainly – Zoom Video Conferencing. Cisco Systems reported that user volume for its Webex collaboration platform tripled from March to June.
The pandemic’s effects even had political ramifications for some. Google found itself ensnared in a controversy in March when President Donald Trump said Google had made “tremendous progress” in developing a web site to facilitate COVID-19 testing and the site would be “very quickly done.” Hours later Verily Life Sciences, a subsidiary of Google parent Alphabet, said the website was in the early stages of development and would initially be rolled out only in the San Francisco Bay area.
It’s too soon to say how much of a long-term impact the pandemic will have on the U.S. economy (the U.S. officially entered a recession in February) and on the IT industry – and how long the downturn will last. While some IT vendors have issued warnings about the financial impact of the pandemic, the industry has weathered the downturn better than other segments of the economy such as the airline and hospitality industries.
All indications are the COVID-19 epidemic will continue to be a major news story through 2020 and into 2021. On July 28 the Consumer Technology Association, citing concerns over the coronavirus pandemic, announced that it was cancelling the physical portion of the massive Consumer Electronics Show, scheduled for early January 2021 in Las Vegas, and would become an all-digital event instead.