COVID 19: vaccines against IT products shortage have not yet been invented

In early spring 2020, there was an equipment shortage in the market due to the announcement of self-isolation, and the demand for software increased sharply. And even after the self-isolation regime was canceled, the lack of goods continued to be felt. And not only because people bought up everything before and during the regime.

And in this case, “EVERYTHING” is not a figure of speech: the devices necessary for organizing remote workstations were swept away not only from store shelves and from the warehouses of corporate suppliers. All the sidewalks in our area were covered with painted "want to buy a laptop in any condition" inscriptions. And, according to visitors to pawnshops, these establishments also sold out all the equipment.

Yandex Market's price statistics also show an explosive demand on the market for certain groups of goods at the end of March.

And this situation is typical not only of Russia. According to the American CRN, solution providers receiving calls from paniсked customers who need dozens, hundreds of additional laptops to power their suddenly home-based staff, have sunk to the point of buying computers in supermarkets. We are talking about purchasing equipment for corporate customers in mega-retailer chains like Costco, Best Buy, or Target. The purchasing departments of American VARs worked in an intensive mode, looking across the country for undersold IT equipment of increased demand. At the same time, you could get good although not guaranteed catch from consistent detour of small shops in the suburbs and small towns, which sometimes did not have a showcase site but could provide vast stocks of IT goods covered with dust.

The coronavirus has provoked not only an increase in demand for IT goods but also the shutdown of factories producing these very goods. And the supply chains built over the years were almost instantly destroyed. Even large vendors, the market leaders, admitted that all this led to a situation where they "... lack equipment to cover the demand for their products, provoked by the lockdown."

Everything, of course, has gradually recovered (or, more precisely, is recovering), but, as Robert Faletra, chairman of the board of The Channel Company (publisher of CRN/USA), writes in his column, the pandemic has done and is causing real damage to the economy, and it will not rise the day we start vaccinating the population.

And then, in the fall, they once again started talking seriously about the likelihood of a second wave of remote work. What does the IT market expect, and what should its players prepare themselves for in these conditions? We decided to ask distributors how things are going with the availability of technology and demand for software, and asked them a few questions:

1. What products are in the greatest demand among your partners due to the current situation?
2. How do you explain this? By the next round of remote work or some other factors? Have all customers who needed to upgrade their IT infrastructure or “buy” missing devices to create remote workplaces managed to do it? Has the demand for equipment grown more among corporate or private clients?
3. Have the supply chains disrupted in the spring recovered, or did you have to build new logistics routes, and maybe even change manufacturers? How do you deal with the increased demand for equipment now?
4. In your opinion, what products will remain or become in short supply soon?

MERLION, Mikhail Stepanyuk, Director of Software Department:

1-4. We are considering exclusively the VAD software segment for corporate clients.

The question is more related to the hardware market. The software market does not always directly correlate with it. At the very least, there is no concept of “short supply” in the software market.

Projects on the corporate software market are not born quickly: the cycle lasts at least 2-3 months, on average six months, sometimes a year or more. We are talking about projects for about 100 users or more.

In the spring, we saw an increased demand for software. The pandemic partly caused it, but this was mainly due to uncertainty in the market and the desire to speed up the completion of procurement procedures. We now see two opposite trends:

• Expansion of infrastructure taking into account the increased load. In operating mode.
• "Collapse" of budgets in the wake of uncertainty and ruble rate growth.

Subjectively, the second trend outweighs the first one.

For many companies, infrastructure solutions made it possible to better withstand the increased load from remote users' point of view. For example, in terms of technology, it is possible to launch a remote user without any infrastructure costs. This is wrong, unreliable, but possible. Some companies have implemented solutions one way or another, but they worked only within the intranet, and due to the pandemic, they only needed to modify the security policy and provide employees with end devices.

If we talk about the growth in demand for software, then the demand has certainly increased for security products and means of providing remote work. For example, access control (IDM), session recording (PAM), as remote access began to develop actively.

At the same time, I should note that it is in this segment that there is very high competition - both from domestic software and foreign analogs, and price wars are not uncommon here.

Overall, the mentioned segments are undoubtedly immense, but not enough to control the entire software market dynamics.

We cannot say that we have seen a significant increase in sales since spring. Everything that has been done and will be done this year is mostly the result of many years of research.

The full version of the article with all experts' opinions is available on the CRN/RE website.