Cloud Services

Digital Transformation During the Pandemic

16 Jul 2020 9:30am, by

Your peers may be placing too much emphasis on their experience handling the COVID-19 crisis over the last three months. The disruptive impact of increased remote work can stimulate spending, but the creative destruction wrought by a recession is nothing to be trifled with.

Everybody (97%) thinks the pandemic has accelerated digital transformation within their organization according to a June 2020 survey of over 2,500 enterprise decision-makers sponsored by Twilio. Almost as many (79%) believe the budget for digital transformation has increased because of COVID-19. But where will that money come from?

IT operations and capital expenses are being cut. As of May 2020, 30% of organizations expect budgets for IT operations to decrease as a result of the pandemic, with only 13% predicting increases according to a report from Avasant Research. A June IDC survey of networking professionals found that more than half of their enterprises have canceled or delayed investments in campus networks, with software-defined WANs also seeing a steep drop. The good news is that since March, spending on network management and unified communications has outpaced those declines.

Short-term outlays to adapt to more remote workers will fade away, with the longer-term impact being on network security and moving more workloads to the cloud. However, over the last ten years, the cloud revolution has really resulted in a more evolutionary diversion of money to IaaS, PaaS, and SaaS.

The top priorities digital transformation are improving the customer experience and increasing business efficiency according to a report sponsored by VMware. If a project is purposefully targeted towards a radical rethink of process and products, then it is transformative. If not, then the respondents in the Twilio survey are mistaking digital transformation for tactical IT spending.

The survey’s question asked about how IT operational budgets are changing as a result of the pandemic.

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Feature image via Flickr.

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