COVID19 is not only a health concern, and it has now become an economic concern for the globe to worry about. The impact of COVID19 on IT industry is not a good sign for the world, because we are more IT-centric now.
COVID19 has now become a game-changer for most of the industries across the globe. Almost all sectors and businesses in these sectors have experienced a substantial impact due to the pandemic condition. The impact of COVID19 on IT industry is also very significant, which has affected the business adversely. The COVID19 India and COVID19 world cases are daily increasing at a rapid pace, and it’s also changing the economy of all nations on a large scale. Most of the industries have started seeing the signs and symptoms of recession in their businesses, which is one of the significant parts of their financial stress.
Vedant Goel, who is also the founder of www.ipocorner.in, says, “The COVID impact on IT industry is drastically changing the business structure, model and plans of the sector. We can see disruption on IT products and services and inflationary risk for the entire industry, which is not good for the future of the industry.”
To know more about the COVID impact on the IT industry, we talked to an expert – Mr. Anshu Goel.
Mr. Anshu Goel is the Managing Director at Alphalogic Techsys Ltd., a Pune based IT Solutions Company which serves its healthcare clients in the United States with Data Analytics and AI-based products. The company is also the first startup which got listed on the BSE (Bombay Stock Exchange) startups platform. Here are his views on the impact of coronavirus India is facing for the IT sector.
Q1. What are your views on the Impact of COVID19 in the whole world, including India?
Mr. Goel: The present time of COVID19 is a challenging time for all of us. For the whole world, for all kinds of persons, be it rich or poor, businessman or job holder, all types of small, medium, and large companies, the pandemic time of coronavirus is creating a hazardous moment. It is an unprecedented time that we haven’t ever seen in our lifetime or history. Talking about the COVID19 impact, primarily, it was just a health issue. But now, it is not only a health issue for the whole world, as it has started affecting the economies of many countries negatively due to complete lockdown. The COVID19 India lockdown is harsher than any other nation, which is also disrupting the economy of our society. The Government of India is taking necessary measures to control the situation, and we, as a citizen of our nation, hope to overcome this situation at the soonest.
Q2. What will be the Impact of COVID19 on IT Industry and our economy in the near future?
Mr. Goel: As mentioned above, the coronavirus India is not only a health issue. In the present period of lockdown, businesses are not allowed to operate normally. Most of the companies and industries in the nation are shut from the past two months due to the impact of COVID19 India. In my view, for another two to three months, it will be a difficult time for most of the businesses in the nation to operate normally. The first quarter time period is almost wiped out for most of the companies, and there will be uncertainty for the second quarter for any business operations to become normal as well. If things regarding coronavirus start improving soon, then the businesses would come back to normal within the next three to six months.
To talk about the IT industry, the COVID impact on IT industry is not good, just like other sectors. In the IT sector, there would be a lot of budget cuts because IT projects are mostly experimental and research-based when they are started. Being attacked by the impact of COVID19 on the IT industry, most of the companies would start cutting down their spending on their research projects. They will only consider core projects. As a result, there could be a loss of jobs, a negative impact on the growth for another six months. But once the problem of COVID19 India and COVID19 world is solved, the IT industry will bounce back faster.
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Q3. As we know that India witnessed a recession period back in 2008, what are your views on the difference between that period and the present recession time in 2020 caused by COVID19 India, keeping in mind about the job cuts?
Mr. Goel: We started our IT business back in the year 2008, during the recession time. Therefore, I can explain the scenario, then and now, as per my own experiences. The period of 2008 was primarily a banking crisis or a financial crisis. During this recession time, we got an encouragement to start a business and create jobs for the deserving people. And today, it proved that we made an excellent decision to start our company at that time. As per my experiences, when the situations are low or, some crisis is going on a large scale, that’s a great time to start.
The present situation of coronavirus India is a bit different as it is a health crisis primarily, not a banking crisis. But, the consequences are economic. This is the significant difference to point out between the 2008 recession and 2020 coronavirus condition, i.e., 2008 was primarily a financial crisis, and 2020 is a health crisis that is resulting in a bad economy. This year, as a result of coronavirus India pandemic condition, the real recession can come. Because the government tax collections would go down, the government would cut its spending and borrowings can go up. Therefore, right now, it cannot be said that we are under a recession. Still, if the COVID19 India continues and the situation of lockdown continues, we may enter a terrible phase of recession.
Q4. After excelling from the recession time of 2008 and being a successful IT business owner, what is the one positive note, which you would like to share with our readers, which can motivate them to get success in this pandemic situation of coronavirus?
Mr. Goel: As per my view, humanity will last long, and it remains above all kinds of situations, be it good or bad. The pandemic time of COVID19 India or the impact of COVID19 on IT industry and other sectors is a temporary phase. We will overcome this situation either when a vaccine for the dreadful coronavirus disease is introduced and applied, or we start adapting the protocols to stay safe and begin our operations within those protocols. Therefore, it is a temporary phase.
While most of the people are finding it difficult to survive in the period of COVID19 India lockdown, but for the leaders, thinkers, business owners and entrepreneurs, it gives a lot of opportunities to reflect and judge on how they could start, grow or nourish their new ideas or businesses. Apart from getting indulged into day to day routine, they can invest their time in learning new skills and planning something new for their companies. A lot of business owners can use this time to recalibrate themselves to adapt these kinds of situations in their businesses and decrease their spending because it is a time to conserve cash and rethink on the operational plans of any company.
One of the most important things, which should be mentioned, is that coronavirus India pandemic is a kind of natural crisis that has been brought upon humans. Keeping this in mind, we, as humans, must respect nature and try to work with it. Once we start the following nature, without negatively affecting it, all will be good.
The impact of COVID19 on IT industry is vast, resulting in adverse effects such as company losses, job cuts, and implementation of many limitations for the operations. The impact can cause a much more challenging time for the IT industry, which will be uncertain for the next few months, as we have analyzed in this series, sponsored by IPO Corner.
Stay tuned with us to know more about the COVID19 impact on other industries as we are coming up with a series(sponsored by IPO Corner) of efforts to make an expert analysis and report on the effects of COVID19 on various industries of India.