Enterprise Software

Analysts take note as SARS' effects ripple through the IT community

As businesses grapple with the effects of the SARS outbreak, analyst firms are trying to assess how the epidemic is affecting IT. Here are some thoughts from several major research firms on how organizations have been affected and how they are coping.


For the past few months, severe acute respiratory syndrome (SARS) has had a large portion of the world, especially China and several other Asian countries, on edge. Aside from the disease’s tragic toll, have you given any thought to the effect SARS is having on the IT community?

I've reviewed recent articles from Aberdeen Group, AMR Research, Collaborative Strategies, Gartner, and Robert Frances Group on this topic. Gartner even created a special Web log that featured the opinions of a number of its research directors and analysts.

The analyst firms referenced here offer opinions and facts on how SARS is affecting businesses and how they will cope with the disease's effects on their companies in regards to IT. Let's take a look at some of the recent opinions from several firms. To read the full text of these and other IT and SARS-related analyst views, visit the Analyst Views IT & SARS Focus section.

Aberdeen Group
Effects
  • “The IT spending recovery is under threat by the escalating SARS outbreak."
  • "…even if SARS is contained and travel bans are lifted before the middle of the third quarter, total world IT spending will be reduced by more than $2.2 billion (U.S.)."
  • "…it is having a negative impact on technology demand…and the supply is also under potential threat."

AMR Research
Effects
"In a world where so much merchandise is made overseas, the results have been dramatic, and are still unfolding daily, with effects to be felt for months to come. Trade shows in China and Hong Kong have been postponed or canceled, and buying trips curtailed to almost none…face-to-face contact between suppliers and buyers is reduced to almost zero. SARS has truly created a supply chain shock."

Coping
"...its relative impact on brand managers is an object lesson in the value of technology. Those companies with investments in Product Development Management (PDM), supply chain visibility, and strategic sourcing tools are far better positioned to weather the storm during times of supply chain shocks. Face-to-face meetings are less critical when collaborative processes facilitated by technology are in place.

"Perhaps future Return on Investment (ROI) calculations on system initiatives should include provisions for this sort of trauma. These applications move from the realm of supply chain systems into the domain of business continuity."

Collaborative Strategies
Effects
"…travel restrictions by many IT companies have severely impacted IT events in those locations. Sun has cancelled a conference in Shanghai and Intel cancelled its developer forums in Taipei and Beijing."

Coping
  • "With enforced travel restrictions by many global organizations, and the benefits in cost and convenience provided by A/V/D conferencing, we expect to see continued rapid growth of these services over the next three years."
  • "Diyixian, an IP VPN provider in China, has had a 40 percent increase in demand, and SingTel has reported a 50 percent increase in videoconferencing sessions."

Gartner
Effects
  • "The severe acute respiratory syndrome (SARS) outbreak will exacerbate the caution that Asia/Pacific economies and IT markets already exercise."
  • "The impact of the SARS outbreak on telcos will vary by market segment and geography, but it will not increase profits in the industry as a whole….Hardest hit will be the mobile sector in Hong Kong, China, and Singapore. Cellular operator roaming revenue is usually high there due to more international travelers in the region. But with travel reduction in these areas, Gartner expects roaming revenue to fall during 2Q03."

Coping
  • "Organizations must respond strategically to SARS, making themselves resilient and able to quickly adapt to such events….This is an opportunity for organizations to strike bargains for infrastructure and applications that would help enhance resilience. Further, the systems can be stress-tested during the current difficult environment, preparing the organizations to take on such challenges in the future."
  • "…the IT industry may be in a position to see business grow due to the assistance technology can offer people at times such as this. Technology has become a useful tool in keeping us better informed and in keeping businesses afloat during this crisis."
  • "…the outbreak of SARS has fostered new uses and possibilities for e-learning."

Robert Frances Group
Effects
  • "China, Hong Kong, Korea, Malaysia, and Singapore are all considered particularly vulnerable to the one-two punch of SARS and its negative effects on the technology-driven economy. In addition, the region is a major consumer of IT. China is the second-largest PC market in the world, according to some market-watchers."
  • "According to a survey conducted by the Business Travel Coalition, Inc., 61 percent of corporations heavily reliant on international business travel have banned their employees outright from flying to Asian countries because of SARS. Another 38 percent have issued advisories or other official guidance."

Coping
  • "…all enterprises, whether directly affected by SARS yet or not, should take the disease as a clarion call to develop, implement, refine, and update DR/BC [disaster recovery/business continuity] plans, to include disruptive challenges such as SARS."
  • "…67 percent of companies that usually fly people to meetings are increasingly turning to teleconferencing as an alternative, with 43 percent using more Web conferencing."

 

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