Impact of covid-19 on technology sector

Covid-19 has hit all the businesses very hard. Some of them were able to sustain whereas there were some of the businesses which dissolved in just a matter of time. With the view of this, this guide will cover the impact of covid-19 on the technology sector.

Most people think that the technology sector was not affected by covid-19. This guide will show you whether you are thinking correctly or not. We have collected all the problems they were facing. Along with this, we have also collected some of the positive points to keep in mind.

Overview of the Technology Sector

Most people think the technology sector means all IT related services. That’s surely not true. Things like hardware, network peripherals, etc are also included here.

Here are some of the areas into which the technology sector can be divided into.

• Hardware/software
• IT services
• Network equipment
• Network, computer, and mobile chips and part manufacturer

Depending on the category, the business might be affected. If the company was providing only digital services, it is least affected. However, if they were providing all types of services, they were hit pretty badly.

Let’s dive deep into this to know more.

Lockdown and Hardware

Let’s start with the lockdown and the impact on the hardware products. Due to the lockdown, it became harder to deliver physical goods. This cause drop in sales. In some countries, there was a complete lockdown. In this case, the delivery was completely shut down. Therefore, sales dropdown a lot due to the same thing.

The hardware stores were completely shut down. The people who were selling the product online also faced a lot of difficulties. Due to this, the money spent on the inventory were on hold. As a result, the sector faced a lot of trouble in running. There was no revenue source for a couple of days and all the money was spent on the inventory.

Foreign Restrictions

Most of the IT companies offer foreign services. In simpler words, they have clients which are not located in their current country. The same goes for the team. Many companies have their team working from Asian countries.

Due to the global pandemic, the flights were terminated. It became difficult for people to communicate and set meetings. Although, there were many digital means of communication it still became a bit harder to communicate.

Along with this, some of the hardware products that IT companies were imported from other countries was not possible. Due to this, some of the work was delayed.

Talking about the importing, here is the next reason why the hardware industry faced a lot of troubles.

Import and Export

The digital goods were good but the physical goods became harder to transport. Most companies have imported some of the products from different countries. For example, a mobile phone manufacturer might not have all the material. They will import some of the chips from specific countries.

Due to the lockdown and international flight restrictions, it became harder to import and export stuff. Even though the traditional restrictions were lifted within a few days, it was a bit harder to maintain the cash flow during these days.

Cashflow

One of the major factors that affected the technology sector was cashflow. The companies who have small businesses as clients were facing this issue. Due to the business restrictions, the small companies didn’t generate enough cash to pay the tech companies. This also caused small troubles.

However, this problem was not faced by all the countries. Only some of them faced this problem.

Digital Transformation

Enough with the negative points, covid-19 had a positive impact too. The biggest example here is digital transformation. Due to the lockdown, all the companies were having digital transformation. Digital transformation is the process of moving all the business operations online.

Due to the lockdown, people have understood the importance of digital transformation due to which many companies are going for digital transformation. The only option they have for digital transformation is the IT company.

So, this is the main reason why incoming revenue has increased even during the covid-19 pandemic. They are providing the services to the small businesses and they can run their business due to the same thing. As a result, they are making a good profit.

Work From Home

The next advantage IT or technology company has is the WFH. IT companies have a great advantage of offering Work From Home without having to worry more about the working and the productivity of the employees. Employees can easily work from home with almost the same level of productivity. As a result, they have the plus point over here.

On the additional side, they will save a lot of money on the office expense. They don’t need to worry about the extra costs that might occur. So, this is a big advantage for companies.

Products

Talking about other advantages, most IT companies have their products. For example, they might have an app using which you can communicate or a security application that keeps the virus and malware away.

Due to the lockdown, all the companies have started using one or more of these products. Therefore, the companies which were product-based saw a huge increase in revenue as compared to others.

Some of the products are offered for free where the company makes money with ads or there are some of the products where the company will charge a small amount of money to use the product. Either way, the company is in benefit.

Final Words

To summarize, this is how covid-19 has impacted the IT and technology businesses. Technology was one of the least affected sectors as most of the people were staying at home and using digital means to communicate and do business. As a result, their revenue kept coming even during the hard days.

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