66% of hotels and hospitality enterprises considering SaaS models in COVID-19 response

A new survey from Hewlett Packard’s wireless networking giant Aruba found that IT departments are now making pivotal business decisions in light of the drastic changes forced on all organizations by the COVID-19 pandemic. 

More than seven months into the crisis, enterprises are getting a better understanding of what it will take to move forward and adjust to the new workplace realities, according to the 2,400 IT decision-makers interviewed by market research company Vanson Bourne. 

SEE: Return to work: What the new normal will look like post-pandemic (free PDF) (TechRepublic)

Nearly 40% of IT leaders said they plan to increase their investment in cloud-based networking, while another 35% reported looking into artificial intelligence (AI)-based networking. The report, titled Preparing for the post pandemic workplace: How IT decision-makers are responding to COVID-19, also found that organizations are increasing their use of subscription services. Between 2020 and 2022, the average proportion of IT services consumed via subscription will increase from 34% to 46%, the survey found, adding that use of IT solutions as a service will increase by about 72% in the same time.

“With the emergence of the hybrid workplace, IT leaders are being asked to deliver a delicate balance between flexibility, security, and affordability at the edge,” said Partha Narasimhan, CTO and HPE senior fellow for Aruba. 

“Every part of the workplace needs to evolve: The campus must be embedded with technology to support social distancing and contactless experiences, and the home office must offer enterprise-level connectivity, security, and support. It’s increasingly clear that to support these new needs in a financially challenging environment, IT decision-makers are attracted to the reduced risk and cost advantages offered by a subscription model.”

SEE: Top cloud providers in 2020: AWS, Microsoft Azure, and Google Cloud, hybrid, SaaS players (TechRepublic download)

Of the 2,400 IT leaders surveyed, 22% said they had seen widespread furloughs, layoffs or business closure, and another 52% dealt with some amount of limited function. The study found that just 6% said that there had been no notable impact on their employees.

IT leaders from certain countries or industries were particularly hard hit, especially those working in hotels and hospitality as well as those in India and Brazil. Almost 80% reported having to delay projects, but the highest numbers were in hospitality and education. More than one third of the IT leaders in each industry had to cancel a project since the onset of the COVID-19 pandemic. 

Despite the downturn, the study does note that most IT decision makers said they had gotten similar, if not higher, levels of investment from their organizations due to their outsized role in coordinating distributed teams. 

“IT decision-makers suggested that they will be moving ahead with investments that enable them to meet the needs of highly distributed teams. Seventy-four percent are either maintaining or increasing their investment in SD-WAN or SD-Branch, while just 20% are scaling back,” the study said.  

“Eighty-three percent said they will increase or leave unchanged their investment in cloud-based networking, with as many as 38% planning to increase it, underscoring its importance for remote management at scale when it is challenging or impossible for teams to be on-premises. Campus-switching infrastructure (74%) and data center networking (81%) are set to see similarly high levels of investment retention or growth,” the report said. 

SEE: Coronavirus: Critical IT policies and tools every business needs (TechRepublic Premium)

The numbers varied based on region, but about one third of all decision makers told the survey they planned to invest in analytics and assurance, AI-based networking technology, and edge compute. This was particularly true for enterprises in India, China, Hong Kong, and Australia. 

More than 50% said they were looking into subscription models for either their hardware or software needs. For IT leaders from Asia-Pacific, the figure reached 61%, with Turkey and India coming in at 70% or above. 

For the hotels and hospitality industry, 66% of IT decision-makers said they were looking into the subscription model, and the numbers were similarly high for the IT, technology, telecoms, and education industries.

The report adds that hotels and hospitality had the lowest subscription IT solution adoption rate of all the eight industries surveyed, with just 26% of solutions being consumed as-a-service on average.

Only 24% of decision makers said at least half of their IT solutions are subscription-based, but when asked what things would look like within 24 months, 41% said they would have more than half of their solutions as-a-service.

SEE: TechRepublic Premium editorial calendar: IT policies, checklists, toolkits, and research for download (TechRepublic Premium) 

“The average proportion of all IT solutions consumed via subscription is expected to increase by more than a third, from 34% to 46%,” the study said.

“In five countries where IT decision-makers said a majority of solutions will be consumed ‘as-a-service’ on average within the next two years: India (69%), US (65%), UAE and Canada (both 58%) and Hong Kong (51%). By contrast, subscriptions will reach average adoption levels of just 27% in Japan, 28% in Russia, 34% in Italy and Spain, and 38% in Germany.”

Narasimhan said the comprehensive changes to the needs of customers and employees in recent months were forcing IT leaders to seek more flexible solutions. 

“They are having to adapt fast and ensure that more complex, distributed networks can securely support the experiences users demand,” Narasimhan said. “The need for agility and flexibility in network management is now greater than ever.”

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