IT directors plan to protect cloud budgets and consolidate vendors during downturn

Cloud infrastructure projects, communications equipment, and collaboration tools for remote work are most likely to survive the economic downturn, according to a small survey of IT directors. Companies that have not made digital transformation a priority will be in a worse position than those that embraced new ways of doing business.

As the report reminds, “Online customer experiences will differentiate digital leaders from laggards.” Companies should invest in tech solutions that make it easier to “establish trust, build empty, and reduce stress” among customers.

A third party surveyed 137 IT directors across tech operations teams in the US on April 1.

Sixty-six percent had the role of director or senior director, 47% of respondents work for organizations that spend more than $50 million per year on tech budgets, and 48% work at companies with more than 1,000 employees.

SEE: Hybrid cloud: A guide for IT pros (free PDF)

Here are the three big takeaways from the “Thriving in the New Normal” survey from the digital operations management company OpsRamp, which reports on how IT leaders can deliver value during the economic slowdown.

Prioritizing digital transformation projects

According to the survey, agile delivery and cloud cost optimization are the most important priorities for tech leaders at the moment. IT managers will be using these tools to respond more quickly to customer demands and increase fiscal discipline. Agile and DevOps practices will drive faster software releases with lower failure rates and quicker recovery from incidents.

IT leaders also need to pay attention to internal customers as well. The report recommends that teams should move from reactive infrastructure management to proactive support of digital transformation efforts by working closely with business owners, developers, product managers, and tech partners.

The financial crunch due to the coronavirus will motivate financial teams to track down redundant, unused, and underused cloud services and turn them off. IT managers also reported that they will analyze worloads and identify the right pricing models—on-demand, spot, or reserved—to maximize savings.

The survey also found that the gap between public cloud platform providers is closing with Google Cloud, Amazon Web Services, and Microsoft Azure each getting an equal share of votes as a preferred cloud provider. Tech leaders are looking for providers that can deliver on business needs

Preserving IT budgets

IT directors who responded to the survey said that IT and DevOps teams will increase funding in these areas:

  • Cybersecurity, specifically identity management, network connectivity, and endpoint security tools
  • Big data and analytics to be able to react to unexpected opportunities and marketplace shifts
  • Cloud infrastructure that are scalable to meet demand spikes and minimize onsite staff at datacenter facilities

IT managers also are interested in new monitoring tools including artificial intelligence for IT operations, cloud native observability, and network performance diagnostics. Sixty-nine percent of IT heads are considering these tools to minimize digital service outages, break down organizational silos, and reduce manual operations.

In mid-March, Forrester predicted that US and global tech market growth will slow to around 2% in 2020. The analysts also said there’s a 50% probability that US and global tech markets will decline by 2% or more in 2020, if a full-fledged recession hits.

Containing costs

To save digital transformation budgets, IT leaders will have to cut costs elsewhere. One way to do this, according to the survey, is to consider self-service technologies such as chatbots, content localization, and interactive voice responses. Another option is to take a look at tool sprawl and consolidate vendors. This tactic can deliver greater purchasing power in terms of cost savings, flexible payment terms, and faster responsiveness to business needs.

Financial analysts who understand tech investments can help communicate the business value of tech spending and align IT spending with corporate goals at the same time. Two-thirds of respondents said a financial analyst is the most important hire at the moment. Directors said this analyst will help highlight how IT teams are positively influencing company objectives including growth, profitability, risk, cost savings, and time-to-market.

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A survey of 137 IT managers in the US on April 1, 2020 found that tech leaders want to save money by investing in self-service technologies.

Image: OpsRamp report