The pandemic is driving new economics for IT. Industry experts explain how budgets and priorities are shaping up to sustain enterprises today and into the future.
Necessity is the mother of invention. The Plato’s Republic proverb could be a call to arms for IT departments during the pandemic as they grapple with rapidly changing needs of workers, partners, suppliers, and customers. IT is reframing its priorities to balance immediate issues with the uncertainty of what lies ahead. Those changing priorities are impacting strategy, budgets, network services, applications, devices, and users, according to industry experts.
Gartner, for example, predicts that IT spending will decline by $300 billion this year, a global drop of 8% from 2019. Experts point out that the budget-tightening is driving IT to move a handful of critical capabilities to the top of their priority lists: support for remote workers; software-defined networking, computing and storage; cybersecurity; managed cloud services, and on-premise, managed infrastructure.
Supporting Remote Workers and Online Customers
Organizations that had the foresight to deploy virtual desktop infrastructure (VDI), collaboration and customer-facing online solutions before the pandemic have had an easier time transitioning to remote work. For others, it’s been a scramble to buy laptops and provide software and support.
Remotely managing servers and other data center gear has been even more problematic, according to Dave James, manager of IT infrastructure at Colorado Access, a nonprofit healthcare company.
“The pain has come from trying to work with different remote management products from different vendors,” said James. “There’s a growing interest in a single pane of glass to manage all workloads in a software-driven infrastructure.”
Steve McDowell, a senior analyst at Moor Insights and Strategy, agrees that software-driven solutions are now more important than ever.
“We’re seeing growth in software-defined everything,” McDowell said.
“With the need to reconfigure infrastructure to handle remote workers, the kind of hands-on, labor-intensive administration that companies once relied on isn’t possible. Software-defined [approaches let IT] take resources they already have and re-provision them. It’s a seamless, cloud-like experience.”
McDowell cited a city in Texas that recently re-provisioned its IT environment to better support remote workers as an example.
“They spun up a thousand virtual machines in a week, deprioritized certain workloads [and] bolstered their virtual desktop apps,” he said. “Software-defined lets you mold your physical infrastructure into what you need.”
Uncertainty is causing some IT organizations to go with newer on-premise infrastructure-as-a-service (IaaS) models. With this approach, routers, switches, WAN optimizers and other equipment are delivered to the enterprise’s data center but are owned and managed by the vendor. As with a public cloud service, however, customers get metered usage and capacity on-demand, they don’t have to make big capital expenditures, and there’s no long-term contractual commitment.
“New U.S. Securities and Exchange Commission accounting rules change how companies depreciate leases,” pointed out McDowell. “So the on-premise, as-a-service model can also lower tax rates as compared to owning the hardware.”
David Ginsburg, vice president of managed service provider Aryaka Networks, has even seen the on-premise, as-a-service model extend off-site to distributed private locations.
“VPNs weren’t designed to handle all of a company’s employees who are suddenly working from home,” Ginsburg, said. “We’re deploying SD-WAN [software-defined WAN] appliances that we own and manage [in the homes of] executives and power users.”
Uptick in Managed Cloud Services
Companies with a cloud footprint have expanded their use of those services, according to industry professionals. Mostly, customers appear to be embracing hybrid and multicloud architectures but not moving applications from the data center to the cloud. Colorado Access’s James attributes that hesitation to the time, cost, and difficulty of moving decades-old systems to the cloud, which will require new processes, workflows, and re-training.
“Hybrid and multicloud will be the dominant architecture in the near future,” agreed John Woodall, vice president of engineering at General Datatech, a worldwide IT solutions provider and network integrator.
“Moving all your workloads to the cloud isn’t necessarily the most cost-effective thing to do right now. It’s also time-consuming to move a lot of data. Before [they move] more apps and data to the cloud, I’m talking to companies about the need for a better, more consistent way to handle their data strategy, wherever that data exists.”
Pervasive Zero Trust Security
Another topic high on IT post-pandemic priority lists is security.
“With an increasing number of workloads in the cloud, industry laggards will insist on deploying zero-trust security, which can be scaled much more effectively in the cloud than putting hardware appliances all over the place,” said Aryaka Networks’ Ginsburg.
Zero trust is an application of the “least privilege” security concept that assigns data and network access rights based on the bare minimum required for individuals and applications to perform their roles successfully. At the network level, zero trust typically involves building very narrow firewall policies around every enterprise server, virtual machine, and service to prevent unauthorized or unneeded access by internal users, external users, and applications.
“The frequency and severity of breaches are much more than what’s in the news,” according to Miles Ward, chief technology officer for SADA Systems, a cloud-centric business and technology consulting services company.
“Companies need to renew their focus on security, conduct active penetration testing to guard against being compromised, and de-risk wherever possible.”
In addition, the attack surface has exploded in size with the arrival of more mobile devices and remote endpoints, said General DataTech’s Woodall.
“IT is pursuing security at every level ─ in the data center, at the edge, in the cloud, in devices,” Woodall said. “And we’re seeing much more interest in cloud and especially software-as-a-service as more secure options.”
A Boost to Digital Transformation
Despite projected IT budget cuts, there is a growing consensus among IT professionals that the pandemic may have actually accelerated the pace of digital transformation. Virtual and augmented reality technology, for example, is being looked at by some companies wanting better interactions among employees and with customers. As the pandemic has kept consumers at home, L’Oréal, Kendra Scott and Suitsupply are among the retailers that have introduced virtual “try-on” tools to engage with shoppers.
Another facet of digital transformation influenced by the pandemic has been advanced analytics. Organizations need to understand constantly changing conditions to assess where they are now and plan how to move forward in a dynamic environment, according to author and analytics expert Fern Halper in a May 2020 TDWI blog.
“This includes gaining insights into customer behaviors, which impact products and pricing, optimizing supply chains, and continually updating revenue forecasts. All of this is the bread and butter of analytics,” she wrote.
SADA Systems’ Ward agrees.
“The way COVID-19 is being tracked and reported is also driving interest in business analytics,” he said. “With COVID, you’re seeing hospitals and epidemiologists put out sophisticated analytical modeling, with projections and growth curves. Business executives are seeing that and asking IT: ‘Where is that in my business? I want it!’”