The global coronavirus pandemic has wreaked havoc across countries all over the world. The effects of COVID-19 have been felt by people everywhere and all industries have had no other choice, but to deal with the effects. One of the sectors that have been impacted include technology, which saw the electronics value chain disrupted, the raw material supply affected and products were exposed to inflationary risks. According to Shay Benhamou, if you look at it from a positive aspect, these disruptions led to the acceleration of remote working and there was an increased focus on de-risking and evaluating the end-to-end value chain.
It led to reduction in carbon emission, which could also shift the focus towards sustainability practices. The landscape has shifted in different areas of the technology sector, due to which numerous tech companies have been affected. Shay Benhamou has shed some light on some of the long-term COVID effects on different types of tech companies and they are mentioned below:
- Hardware and Software companies
Due to the supply chain constraints, smartphone manufacturers have had to deal with a lot of problems and so, they have deferred the launch of new products. Moreover, their sales have also been affected because of lower consumer confidence as mobile phone users on contacts are not replacing their devices. While factories have begun to open up in different regions, Shay Benhamou states that tech companies are still facing challenges when it comes to getting production running fully. This could have significant impacts in the long-term.
In contrast, software has become a growth catalyst for tech firms because it hasn't been affected by the shortage of parts or the disruptions in the supply chain. Meanwhile, there has already been an increase in demand for remote-working technologies, which means tech companies are scrambling to cope up and provide businesses with solutions for enhancing their remote-working capabilities. Apart from that, Shay Benhamou noted that security software spending has also gone up because a growing remote workforce means that endpoints have to be secured. This is particularly true in the case of log management, cloud-based tools and VPNs.
Hardware tech companies have also seen increased demand from enterprises, as they are placing large orders for mobility devices and laptops for supporting employees that are now working from home. According to experts like Shay Benhamou, there will also be continued demand for services related to cloud infrastructure and spending on specialized software will also go up. Telecom services and communications equipment is also experiencing a growth in demand because employees are working from home and schools are also operating remotely.
Along with this, tech companies that deal with communications and network equipment are also experiencing an increase in their demand and it is expected to go up. There is a great need for faster access to automation and data, which has boosted the deployment of 5G networks and is contributing to the adoption of 5G equipment. Shay Benhamou has also discussed how tech companies dealing with semiconductors have had to face a number of challenges.
Supplies of raw materials, such as copper, aluminum and chemicals has been disrupted and there have been quarterly delays in deliveries, thereby making re-inventory difficult. The lack or shortage of components in the market has occurred primarily because of these issues, as there have been disruptions in supply and fulfillment throughout the electronic manufacturing value chain. Some choke points have been created at systems and board manufacturing and they will take time to resolve because things are opening up gradually. As far as the long-term is concerned, Shay Benhamou asserted that new product schedules will continue to be delayed and there may be some changes in go-to-market strategies for meeting the velocity of the value chain, such as decisions and designs. These delays can lead to reduced participation in internal meetings, customer meetings and external events.
Another potential effect of COVID is the rise in use of teleconferencing software, as employees are being encouraged to telecommute by more and more companies. This doesn't just include businesses in the tech sector, but other industries as well. Tech startups and companies dealing in drones, robotics and vehicle automation are also trending. AI i.e. artificial intelligence has become a huge enabler of these technologies. For instance, Amazon is taking advantage of machine learning and using it in its warehouse in order to conform to the social distancing measures.
Moreover, the problems of supply chain disruptions are also being addressed through the use of vehicle automation, drones and robots. According to Shay Benhamou, tech companies are now exploring the idea of minimizing human involvement as much as possible in the supply chain, as this will help in avoiding a similar situation in future pandemics. The use of automated trucks, robots and drones is being tested and is expected to become commonplace throughout the supply chain in the near future. Tech firms that focus on developing medical equipment have also experienced an increase in demand due to the health problems people are facing.
Telehealth has also become popular, so companies have had to develop a horde of apps that can be used for delivering healthcare services remotely. Furthermore, as-a-service solutions for machine learning, robotics, artificial intelligence and other technologies have also been developed. Zoom is one example of these solutions, which was in great demand during the pandemic because a lot of people were working remotely. This was also because of the cloud revolution and according to Shay Benhamou, it is expected to continue in the near future.
The COVID-19 pandemic is far from over and its impacts will be seen gradually, as people begin to adapt to the new reality. Vaccination rollouts have begun, but it will take time for countries to achieve herd immunity, something that has been made difficult because of the development of new variants of the coronavirus. Nonetheless, Shay Benhamou highlighted that tech companies have had a much better time in handling the situation, simply because they were better equipped, but they will also have to deal with changes in the long run.