A global recession is “inevitable,” following geopolitical shocks and soaring inflation, says The Economist, with fears in the US driven by tighter monetary policy and rising interest rates. JP Morgan predicts the US economy expand at an 0.5-1% pace in 2023, which is a slowdown from 1.5-2% in 2022.
The start of the year may be stormy, but there are rays of hope for the IT business.
Gartner’s recession advice for clients is to “go on the offensive with IT investments.”
Companies may be asking hard questions about the bottom line, but digital strategies can help organizations reduce the cost of doing business while improving the customer and employee experience.
Cloud Adoption and Opportunities
Cloud spending is not recession-proof, but moving IT services to the cloud, giving organizations the ability to scale up and down as needs shift, allows organization to focus on their core business strength while retaining flexibility. Organizations will lean more heavily on their ecosystem of partners not only for IT services but as trusted advisors.
Experts predict healthy growth for infrastructure as a service (IaaS). Grand View Research estimates the IaaS market to reach $60 billion by 2025, with bright opportunities for as-a-service delivery for disaster recovery, storage, compute and desktops.
It’s also a great time to help customers understand their cloud spending. Nearly all organizations overspend on cloud, and as a trusted advisor, you can help them get costs under control by evaluating their cloud workloads and negotiating discounts. More favorable pricing terms helps customers free up resources for other projects.
Adoption of industry-specific clouds will also accelerate. Finance, healthcare, government and other sectors with stringent security and compliance requirements have been slower to move to the cloud. But the growing availability of vertical cloud services that align with their requirements changes that equation. Deloitte is bullish on the rise of industry clouds, estimating the market potential to be $640 billion—more than two-thirds of the total US cloud market.
Accelerate the Move to Data-Driven
Much of cloud activity has been lift and shift, but organizations that modernize legacy applications and build cloud-native applications can offer their customers a digital experience faster and with more frequent improvements, leading to competitive advantage and market share gains. Modernization can get rid of technical dept, free up operations and maintenance budgets and create space for innovation.
Using advanced analytics and data to drive decisions and operational efficiency will continue to be a priority. AI for IT operations, for example, can automate mundane operational tasks and speed troubleshooting, freeing up IT staff for higher value work.
Across industries, AI and machine learning are increasingly used to improve customer service, automate business processes, and proactively maintain equipment. Despite all the media headlines, we’re in the earliest phases of AI adoption. Forrester Research expects AI software to grow 50% faster than the rest of the software market.
“Do more with less” became the mantra of the 2008 recession. “Pivot” was the watchword of the pandemic. As we look ahead to 2023, we know that the future is unknowable but that we must adapt and thrive.
With digital solutions integral to business operations, organizations rely on their long-term partners to help them drive growth, improve the customer experience and find cost efficiencies.