The COVID-19 global pandemic has affected businesses of all sizes across the industries. However, with most businesses rapidly adopting technology to navigate the various challenges, the IT industry is expected to witness an enormous boom in business in the coming years.
Compared to other industries, a Market Data Forecast study projects that the IT industry is expected to grow from $131 billion in 2020 to $295 billion in the period between 2020-2025. The report highlights the increased demand for software and technology solutions as primary drivers for the growth. A global survey by McKinsey has found that businesses have increased the pace of digitization of their customer touchpoints, supply-chain interactions and internal operations by several years. It also points out that the share of digital products in the portfolios of organizations has increased by seven years.
One may think that the IT industry may struggle as the crisis-driven demand for technology subsides after the COVID-19. However, experts think that most of these changes will stick in the long term. In the long term, companies are expected to make big investments in technology.
- Communication and collaboration solutions like videoconferencing, messenger apps etc., have witnessed a huge boom as a way for employees to work from home, students to learn and for people to socialize. Companies offering these solutions as well as internet service providers have experienced historic growth in the user base.
- Digital transformation consulting and solution providers also experienced huge growth as companies accelerated their digital plans and looked for digitalizing their operations.
- Entertainment providers like gaming companies and social media also grew massively as people looked for ways to entertain and be in touch with their friends and families.
- Cloud service providers also saw a massive demand for their services as many companies operate with their employees working from home, schools going online and customers shopping online.
- Digital payments skyrocketed across the globe as people avoided using cash and cards for hygienic reasons and mostly shopped online. Mobile wallets usage jumped historically even in physical stores.
- Companies specializing in AI and other data technologies also witnessed high growth in their key metrics as companies went online and felt the need to harness their data. AI-driven chatbots were in high demand as customer support teams of many companies were working with limited staff.
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It is likely that much of the demand and growth, we are seeing now can subside over time. Technology demand directly stems from the existence of the COVID-19 pandemic, like OTT entertainment, gaming, virtual learning, social media etc. However, the COVID-19 has made a significant impact on the way people live, work and interact socially. Many of these changes will be for the long haul.
The healthcare crisis has created deep awareness of hygiene and healthcare. A lot more people took to online fitness training and have found an effective alternative to stay fit at home. These people would prefer to have online options available to them even after gyms and fitness centers reopen.
The same holds true for contactless payments and e-commerce. The pandemic has compelled many people to order online or use mobile wallets to pay, thereby, massively widening the user base. And many of these people will not return to their old ways as they get used to the convenience and are able to trust the security of these solutions.
In the future, there will be more demand for technology solutions and services from both public and private sector organizations. The public sector will look to leverage technology to improve its agility and responsiveness to a crisis, enhance its capabilities and scalability. The COVID-19 crisis has changed the way government institutions work, interact and deliver services. The public sector, which is at low maturity in many countries, has realized the benefits of using technology and this may trigger a cultural and psychological shift. This will lead to more demand for technology and technology-enabled products and solutions.
Private and business organizations will look to leverage technology to cater to the new demands of their customers. With the rapid digitalization of businesses, customer experience would be a key differentiator. Companies will also look to automate their operations to bring efficiency and cut costs. Data analytics and AI will also be in high demand as companies look to harness data to improve their processes and decision-making.