Enterprise infrastructure, networking forecasts revised due to COVID-19

By Amy Sarcevic
Friday, 01 May, 2020

Enterprise infrastructure, networking forecasts revised due to COVID-19

The enterprise infrastructure and networking industries in Australia and New Zealand (ANZ) are to fall drastically short of growth estimates and recede in the face of COVID-19, says the International Data Corporation (IDC).

Last year, IDC forecast a 3% revenue increase for the sectors during 2020. But it has since altered its outlook, instead projecting a decline of 3%.

The shift in its forecast is due to the added impact of COVID-19-related setbacks, on an already shaky economic foundation.

Market pressures began some time ago — with Brexit, economic slowdown in China and tighter local credit conditions all impacting Australian GDP.

Although the industry had proven resilient to these factors — and was forecast to rebound from its 2018 downturn — COVID-19 has tipped the scales in the opposite direction, says the IDC.

On the demand side, widespread work from home mandates have reduced the number of transformational infrastructure projects, with companies spending more cautiously on this front.

On the supply side, COVID-19 has led to movement restrictions and staffing issues, causing outages and delays.

IDC predicts that the networking equipment market will take less of a hit than the server and storage industry.

“Lesser impact is expected because engineers always keep future requirements in mind at network designing stage,” said Cynthia Ho, Senior Research Manager at IDC ANZ.

The organisation also expects that more enterprises will turn to cloud-based resources for business continuity, as remote working becomes a long-term reality.

“We expect higher adoption of cloud and next-generation architectures such as hyperconverged systems ... as the need for virtual desktop infrastructure (VDI) continues to rise,” said Ho.

Despite the gloomy projections, IDC says the industries will play a critical role in futureproofing enterprises during COVID-19. However, against the challenges, a transparent and flexible approach will be key.

Image credit: ©stock.adobe.com/au/wachiwit

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