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How COVID-19 Impacted IT Budgets


A business person working inside because of COVID-19
Image: Jiw Ingka -
Like many industry watchers, I expected to see IT budgets plummet from the financial effects of the COVID-19 pandemic. Though there are changes to IT spending, they aren’t as bleak as they could be — driven in large part by the need to equip home workers. More than 70% of companies plan to continue with working from home (WFH) strategies indefinitely, according to Nemertes Visual Communications and Collaboration 2020-21 Research Study of 528 companies.
In February and March, just before the pandemic shutdowns, Nemertes research showed 62% of companies planned to increase their overall IT spending from 2020 to 2021, and only 7% planned to decrease their spending. By late May, 53% of companies said they expect overall IT spending to increase, specifically calling out the need to support WFH. In addition, of the 28% who said IT spending would decrease since the pandemic, 19% expect to spend more to support WFH, nonetheless.
Clearly, companies are investing in the home office, and several technologies will see a spike in spending during the coming year. One broad shift for 2020-2021 is an accelerated shift to the cloud. Nearly 65% of companies said they are more likely to use cloud services because of the shift to WFH. We asked these companies about spending changes in specific technology areas and their top three include:
  1. Video meeting applications – 52% of companies plan to increase spending on video meeting apps, spending it on services like Amazon Chime, Avaya IX Spaces, BlueJeans Meetings, Cisco Webex, Google Meet, Microsoft Teams, Zoom, and others. Video has helped keep remote workers connected for years, but since the pandemic, it’s become a crucial technology in the IT toolkit for managing employees, maintaining productivity, and communicating with customers.
  2. Team collaboration – 45% of companies plan to spend more on team collaboration, from providers such as Cisco, Microsoft, RingCentral, Slack, and increasingly, Zoom. Often integrated into a video solution, team collaboration helps organization collaborate through messaging, screen sharing, and organized workspaces.
  3. Security – 45% of organizations plan to spend more broadly on security, as well. This includes network security from home offices, application security, and even physical security, so providers in use are all over the map.
In addition to investments in new products and applications, companies also are improving their own IT support services for remote employees. In years past, when employees worked from home offices, IT staffs provided minimal—if any—IT support. Employees were on their own to figure out Wi-Fi and Internet access. Now, IT is providing home Wi-Fi assessments, voice and video quality monitoring, assistance with selecting the best Internet plan, and even lighting guidance for video calls.
Several other technologies will also see a spending increase (and even some decreases). At this year’s Enterprise Connect Digital Conference & Expo 2020, I’ll review these spending changes and others during my session, "Priority Overhaul: How the Pandemic Changed IT Spending and Plans."
During the session, I will review what equipment (webcams, headsets, executive video systems, backdrops, and more) companies are now providing to home workers, and how enterprises also are using app performance management, contact center apps, app utilization analytics, and virtual assistants to improve the WFH experience. Additionally, you’ll see how successful companies are providing more equipment and IT support to their home workers (not less) and explore how enterprises within Nemertes’s success group have improved employee efficiencies, increased revenues, and decreased operational costs with the help of collaborative technologies.