A new research says most CIOs expect a U-shaped recovery due to the COVID-19 impact.
According to the latest report from Enterprise Technology Research, 44% of IT leaders and CIOs believe they will witness a U-shape recovery, as a decline in revenue will continue till the end of 2020. The executives also said they will see growth returning next year. At the same time, around 30% of IT leaders said they are more optimistic about the markets. Nearly 15% of executives expect a less severe downfall in revenue and fast bounce back in the latter half of 2020 while, 16% expect an increase in revenue once the lockdown is over, found the report.
The coronavirus pandemic has not had an impact on all companies, says the report. This is because some of them, especially those in cloud solutions, annual recurring revenue models, and remote-work solutions have seen a significant demand. However, not all companies will see a growth, once the market starts witnessing gradual increase in economic activities. Sagar Kadakia, head of research at ETR says, CIOs that expect a stronger recovery base are considering two main factors no possibility of another complete lockdown and arrival of COVID-19 vaccine within the mid-term timeframe. The shape of recovery, however, is expected to differ from industry to industry.
IT, telecom, retail, and consumer industry are expected to witness relatively low L-Shaped recovery expectations. The V-shaped and U-shaped recovery is expected to be higher for IT and telecom industry followed by the retail sector.
According to the report, the majority of CIOs believe they will see a permanent change in IT spending priorities due to COVID-19. IT leaders are expected to adapt to the “new normal” in the second half of 2020. More and more companies are shifting from traditional multiprotocol label switching or MPLS networks as a large part of the workforce is now working remotely. A whopping 92% of CIOs said that IT spending priorities will shift permanently to support remote workers. Leaders are also witnessing higher productivity levels, and surprisingly, many companies are fairly well-prepared to support remote workers, added the report.
In terms of revenues, several enterprises have already slashed their earnings guidance for the remaining quarters. Many of them expect the demographic of younger consumers will help in the revival of the economy.