This blog explores the impact of the current COVID-19 on enterprise storage budgets and buying plans. We take a look at how different types of storage systems are impacted by the budget cuts in the wake of diminished earning potential.
The entry of the COVID-19 pandemic in early 2020 has significantly altered the workings of every firm. And the impact continues. That is why many IT firms have revaluated their enterprise storage strategies, plans, and even purchases.
Shift in budget allocations for storage infrastructure
At a time when human health was impacted, companies across the globe were presented with various challenges too. And that has led to economic instability, thus, compelling almost every business to work remotely. And while the businesses were operated from home, IT departments around the world were swiftly deploying technologies to retain business continuity during the worldwide health crisis.
This huge shift in the work environment resulted in the alteration of hardware, software, and even services.
Currently, a handful of IT firms have delayed or froze their outlays on storage infrastructure, while some have started working on the planned projects. But again, few firms are rushing the purchases after receiving an alert regarding possible disruption to the enterprise storage supply chain from the vendors.
Delay in Ethernet switching
As of now, most of the enterprise storage providers have managed to deliver the services as promised. But many enterprise storage providers believed that the situation can take a turn in the second and third quarters.
In fact, Ethernet switches that are utilized in iSCSI storage are already in short supply. There were times when the delay was of a maximum of 10 to 20 days, but now one can expect a 90 days delay too, meaning the supply chain shortage is becoming a real thing.
Many IT firms have started adjusting their purchase schedule so they can survive the impact of lead time stretching. For instance, the purchases for September’s anticipated needs are made now, which otherwise should have been for June’s needs.
SSDs may have to wait
Talking about the delay in receiving products, we can expect the same with SSDs too. Many people who ordered the SSDs in the month of early march ended up receiving them at least three to four weeks later than expected dates.
For some businesses, these delays may not cause a lot of problems because almost every project is on hold, similar to non-business-critical investments. But the delay can cause an agonizing blow to other businesses that relied on the SSDs to survive; however, if any business had made significant investments in storage infrastructure just before the pandemic started, then the delays won’t be much of an issue.
Similarly, businesses with a long-term strategy planned to surpass time-in-point issues may have little to zero impact, even with a grave magnitude of disruptions caused by major events like the pandemic.
When seen from a larger perspective, it is evident that not many firms have faced a lethal impact due to enterprise storage product constraints. Many firms were just as busy as they were before, even during the shortage.
The decline in enterprise storage spending
As said before, the supply chain shortage will definitely hurt a business that is expected to survive on the made purchase. These businesses range from mid-size to smaller firms. In fact, the COVID-19 pandemic has hit them harder.
For instance, an insurance company that once thought of replacing their primary storage by the end of the year has changed the plans and limited the project’s scope. Similarly, many infrastructure administrators have revealed that insurers are only updating their headquarters’ data center while the other data centers are offered with third-party support, and hardware remains untouched.
And since the quotes of many small to mid-size businesses are getting overhead, they might spend less this year and may not have enough to buy storage even in the next year.
Earlier this year, IDC predicted that the overall IT spending is expected to decline by 2.7% within this year, the reason being the economic impact caused by the pandemic. And that is clearly visible now. IDC even reported that spending on storage and servers would also decline by 3.3%. However, the analyst firm mentioned the expected growth in infrastructure because cloud providers and services are spending on servers.
Cloud storage will interest a lot of firms
Since the work has been conducted remotely, cloud storage is expected to be the new favorite. In fact, the pandemic has increased the usage of public cloud storage use to floor manufacturer’s unorganized data.
Many companies were smart enough to update their VPN connections so the workers can start working from home at a short notice period. Moreover, these companies ensured to combine file hosting services to their IT infrastructure so the employees can have access to personal data.
But again, cloud storage isn’t as effective when the employee may have petabytes of research data while accessing the desktop remotely. This is because cloud storage is quite expensive.
Even though the storage plans are currently on halt or at least altered, reports published by SWZD clearly states that the IT budget will continue to grow instead of contracting in 2021. But, the revenue is expected to deteriorate in 2021 because of the decelerating economic activity caused by the ongoing pandemic.
Over to you
So, it is evident that the unplanned spending throughout the year has diverted the businesses from making any bigger investment, at least for mid-sized or smaller businesses. And that will continue in the next year too.
As of now, IT buyers are deprioritizing the need for cutting-edge features and are more focused on the pressing needs of the organization.
How is the enterprise storage budget impacted at your organization? Do let us know your valuable insights on this theme.