By its nature, ICT is in constant evolution. However, 2020 was a perfect storm that accelerated the growth of a number of trends and shone a spotlight on the critical role technology now plays in reacting to, and mitigating the impact of, unanticipated worldwide crises. Having the right properly-maintained infrastructure in place has never been more important for individuals, companies, governments and NGOs.
It’s the start of a new year and we are all anxious about what lies ahead. To help you cut through the noise and abundant technology predictions, we’ve selected three key ICT trends to watch in 2021 and explained how they will impact the multi-vendor IT hardware and Third-Party Maintenance markets.
Trend 1: New technologies will make up an increasing percentage of ICT spend
After remaining essentially flat due to the global health crisis of 2020, ICT spending is forecast to start increasing again in 2021, with a growing percentage earmarked for investment in new technologies. According to IDC, the emergence of IoT already contributes significantly to market growth and within the next decade new technologies such as robotics, AI, and AR/VR will also expand to represent over a quarter of ICT spending. But there are a few caveats. Barriers to the adoption of new technologies, for example a lack of cloud infrastructure in emerging markets, mean this trend may take longer to gain ground in certain places. Smaller companies, more driven by end-of-cycle hardware replacements, are also likely to take longer to increase new technology spend. Lastly, a grain of salt may be in order as enthusiasm for new technologies may outpace their actual adoption, as Gartner found for AI where only one in five CIOs achieved their 12-month adoption objectives.
Any technology, even the newest, relies on physical hardware and infrastructure that needs to be maintained in order to function properly. Forecasting maintenance needs to be done at the same time as new ICT investment, not in five years’ time after it’s out of warranty from the OEM. Furthermore, supporting companies by extending the life of their existing infrastructure, and offering refurbished core equipment, delivers savings which can be reinvested in new technologies.
Trend 2: Growing demand for second-hand ICT hardware
The purchase of second-hand hardware is on the rise and is expected to continue its upward trajectory in 2021 and beyond. IDC puts the CAGR at 5% and estimates sales of used ICT infrastructure will reach $36 billion by 2024. The key drivers of the trend appear to be a greater concern for the environment by companies and their millennial employees as well as financial considerations, both for buying and selling second-hand equipment. Although the economic downturn of the past year has certainly helped bolster the eco/budget-friendly trend, this shift predates the Covid-19 crisis, demonstrating a more fundamental and resilient trend. Susan Middleton, research director for flexible consumption and financing strategies for IT at IDC, says that second-hand equipment purchases are often made to add capacity rather than for equipment refreshes. Organizations also benefit from acquiring fully configured systems as an alternative to buying new. Lastly, this purchasing approach also ensures that savings generated can be reinvested elsewhere in the business.
As a vendor of second-hand hardware for over 35 years, Evernex is keenly aware of this trend. We have observed the growth of this market firsthand and expect to see it gain even more momentum in 2021. Our ability to refurbish and certify equipment makes us a valuable partner to our customers as they look to optimize their infrastructure costs without compromising on functionality or quality.
Trend 3: The Cloud will continue to evolve, as will the demand for it
Cloud usage and reliance has been steadily growing over the past decade and, despite challenging economic conditions, it continued to increase in 2020. Booming remote working requirements are pushing organizations to invest more heavily in their cloud capabilities. Deloitte highlights that many deployments are now using an approach called “hybrid cloud” or a mix of public and private cloud environments, which usually includes on-premise resources. This is consistent with “data repatriation”, another trend where organizations move data back from the cloud to on-site servers to improve security, availability and cost effectiveness, as well as regain a greater measure of control over their data. We are seeing this trend play out in the market as Evernex clients continue their cloud migration and increasingly adopt a combination of both on-premise and off-premise solutions.
Wherever there is cloud, there are data centers and infrastructure that need to be rigorously maintained. The evolution towards a hybrid cloud model is particularly interesting for IT hardware and TPM providers like Evernex because we have a lot to offer enterprises that are looking for the right balance between off-site cloud services and on-premise servers at a sustainable price.
2021: a year of continued growth, evolution and opportunity
If the above demonstrates anything it is that despite the disruptive year experienced in 2020, ICT trends are continuing to build progressively and in the same direction they were going in prior to the global crisis. Concerns around investment in innovative technologies, cost, data security and control, as well as sustainability have been at the fore for a number of years and they will continue to drive change and purchasing decisions in 2021.
The next twelve months are set to be bright for the IT hardware and TPM markets as organizations continue to increase their on-premise and off-site infrastructure requirements, particularly though hybrid cloud models, and move towards the adoption of second-hand equipment purchasing.
Evernex has leveraged its technical and business expertise to become a leading provider for critical IT systems and maintenance services worldwide. Contact us today to learn more about how we can assist you with maintaining your critical IT infrastructure.