Not surprisingly, video and team collaboration tools will remain an enterprise priority in the coming year as many offices expect to remain largely closed until at least the summer.
After scrambling in 2020 to keep business operations going amid a pandemic, companies are eyeing even higher spending in 2021 on collaboration tools to support remote workers. But with vaccines rolling out now and uncertainty about what a “hybrid workplace” might look like, those same companies are likely to spend cautiously due to uncertainty about the wider economic environment.
Even with vaccinations offering hope for something of a return to normal in the year ahead, remote work will remain a necessity for many organizations. More than half (54%) of respondents to a Pew survey published this month said they want to work from home “all or most of the time” when the coronavirus outbreak is over, while a third would do so “some of the time.” Only 11% say they’d want to do this “rarely or never.”
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The ongoing need for tools to connect these remote teams will drive increases in collaboration spend next year, said Irwin Lazar vice president and service director at Nemertes Research.
A survey of spending intentions over 12 months from mid-2020 to mid-2021 by Nemertes Research from June, indicated that just over half (52%) of respondents planned to increase budgets for video applications, while almost half (45%) expect to invest more in team collaboration apps such as Slack and Microsoft Teams. Follow-up research from Nemertes in recent weeks indicates that buying intentions have not changed much in the interim.
Increases in spending are likely to be relatively modest, however — likely in the single digits.
“Overall, I think companies are cautious for next year,” said Lazar. “They are looking at an incremental increase in spending on collaboration in the order of 10% or less, with an eye towards better supporting home workers and adding more video; that is really where the primary areas for investment are.”
An unclear future makes budgeting tough
With real uncertainty over when the pandemic might end and a sustained global economic recovery could begin, many IT departments are likely to take a wait-and-see approach when setting budgets for collaboration investments in 2021.
“What I hear a lot of is, ‘I’ve got three budgets for next year,’” said Lazar. Those budgets include spending based on a worst-case scenario, where financial markets tank and spending is “cut to the bone”; a “keep everything steady” budget; and, finally, an optimistic budget where economies are booming, and companies undertake a “massive expansion” in spending, he said.
Data from analyst firm IDC indicates that around half of businesses globally (48%) expect to increase spending on collaboration software in 2021, according to a recent survey report (subscription needed).
“The need to empower collaboration in the enterprise has clearly been a lesson learned in 2020,” said Wayne Kurtzman, research director for collaboration at IDC. “2021 is the time to improve it, often through software integrations and making [collaboration software] part of the core IT stack and enabling all workers.”
A 451 Research survey report (Voice of the Enterprise: Workforce Productivity & Collaboration Technology Ecosystems 2020), which tracks planned corporate technology purchasing in the first half of 2021, paints a similar picture, with collaboration spending largely protected as businesses tighten other areas of their IT budgets.
“Despite the economic downturn stemming from the COVID-19 outbreak, IT spending on employee productivity, communications and collaboration technologies will remain unchanged or increase over the next six months,” said Raul Castanon, a senior analyst at 451 Research/S&P Global Market Intelligence.
451 Research/S&P Global Market Intelligence
451 Research’s found that nearly four in five respondents expect their organizations to either maintain or increase spending across categories that include content storage and sharing tools (85%), video collaboration (84%), remote work equipment and peripherals (83%), digital workspace (80%), team messaging and collaboration (79%) and unified communications (77%).
Some of these categories will see marked increases: about half of respondents expect their organizations to bump up spending in video collaboration (51%), remote work equipment and peripherals (50%), and team messaging and collaboration (46%), according to 451.
To put this in context, a 451 Research study earlier this year — “Voice of the Customer: Macroeconomic Outlook, Corporate IT Spending” — indicated that more than a third (38%) of buyers of hardware and software products and services expected to decrease overall IT budgets in Q3 2020, with just 9% increasing their outlays.
Hybrid remote strategy will spur more spending
During 2021, many businesses expect to support a greater mix of remote and in-office staff, often referred to as a “remote hybrid strategy.” A Gartner survey earlier this year indicated that, in the longer term, 82% of business will let staff work remotely some of the time.
An expected return to the office is unlikely to dampen enthusiasm for collaboration tools. “Our data suggests more collaborative platform use and more integrated applications ahead, even when we start going back to the workplace,” said Kurtzman.
Businesses are likely to target new spending on upgrading collaboration hardware as workers begin to return to the office next year; Lazar expects greater spending on video room systems that connect in-office and remote staff.
“Video will be part of every meeting going forward,” he said, reflecting the assumption that many businesses will adopt a hybrid model where some workers are in the office, while others continue to work remotely.
Improving home-work setups will be a focus, too, as companies move to upgrade equipment such as audio headsets and webcams that, in many cases, were acquired as a temporary fix at the start of the pandemic.
Other remote working investments, such as VPN upgrades, as well as security and performance analytics, are likely to be prioritized, he said. And many businesses could increase stipends for home workers to help offset the added costs of maintaining a home office.
Another area of focus companies are likely to hone in on is finding ways to lower costs related to existing collaboration software investments. That’s especially true for companies with multiple, overlapping solutions.
“Companies I’m talking to now are focusing on, ‘Can we reduce support and licencing costs by going to a single integrated vendor, [and] move our on-prem platforms to the cloud more quickly than we had before,” said Lazar. “All of those typically lead to cost savings.”