The IT Services sector and technology services companies have found themselves in an unprecedented situation due to the COVID-19 pandemic. But before explaining what has happened and what will happen from now on, let's clarify the definition of technology services, or IT Services. Gartnerdefines information technology services as the application of business and technical expertise to enable organisations to create, manage, access or optimise information and business processes.
Once defined, we will look at how the sector has evolved up to the pandemic, and then focus on the changes it has brought about in the information technology services sector.
Up to this point, the IT Services sector was growing at a rate of 2.2%, which is a constant figure and not bad considering the crisis we have suffered in the last 10 years. Although it is true that in the last four months of 2019 they rose 30 basis points (0.03%), 400 points (4%) less than the previous year. According to Elitsa Bakalova, an analyst with the firm TBRThis happened because providers in the IT services sector kept investing to expand their portfolios and resources. That idea was going to allow them to have more movement in terms of business transformation initiatives.
But as the pandemic spread around the globe, companies had to radically change the business ideas they had in mind for 2020 and even for the years to come. In the case of IT Service companies, it is true that many of their customers are rapidly moving their workloads to cloud environments, in this case to the hybrid cloud, one of the many services offered by the IT Services sector, to be able to work from home, for example.
But, on the other hand, it should be noted that technology companies have been hit hard as many companies are delaying or cutting IT spending in the short term. In turn, the sector's industries will also be affected by the large amount of work they will have to do in the short term while their customers are completely or partially idle. This will cause a massive slowdown in IT Service projects as spending in the sector's businesses is reduced.
Finally, as the pandemic subsides, companies should, according to experts, engage with managed service providers to avoid high capital expenditure and technology service provider bills. And in turn, technology companies should be prepared to manage the enormous amount of data being generated in the cloud, storing it in a secure way. This could be achieved by using new means, such as AI (Artificial Intelligencel) or machine learning tools, for example. What is clear is that they are facing something unprecedented in history and a great challenge for all of them.