IT Industry Observations and Constraints 2022

03 May 2022

Published in: Member News

Despite the freedom of the lifting of Coronavirus restrictions for many of us, IT buyers can expect to encounter challenges when purchasing IT equipment over the year 2022.

Despite the freedom of the lifting of Coronavirus restrictions for many of us, IT buyers can expect to encounter challenges when purchasing IT equipment over the year 2022. Throughout 2022, it is expected approximately 40% of IT departments and IT businesses will have to deal with: limited product availability, shipping delays, supply chain issues, increases in product costs, and chip shortages. Along with this, there is also the new challenge and popularity of remote working and hybrid learning. Transportation It was no secret that the transportation industry was hurt during the global pandemic, with many countries having Covid restrictions and lockdowns, it became harder to transport goods, especially overseas. With this comes a backlog of goods being transported and longer shipping time as different countries have different restrictions. The delay in materials being imported and exported due to the backlog and restrictions has led to constraints in the number of IT products available. Brexit Transporting from Europe to The United Kingdom and vice versa has also faced delays due to Brexit. Without the backing of the EU, the UK must bear in mind the following when importing goods: - · Depending on the goods being transported, you may need a specific export licence as the EU and individual companies require clearance before certain items enter. With the UK no longer being a part of the EU, the transportation routes may be changed and more limited than they were before. · Drivers will also need to carry export licences - an ATA Carnet document for moving goods out of the UK temporarily. All this can lead to an increase in transportation costs and delayed delivery times. Also due to Brexit, the price of shipping has increased, with Import VAT being charged on items valued above £135.00. Chip Shortages By far one of the biggest threats and constraints to the industry now is Chip shortages. According to the SWZD State of IT Report, 56% of IT manufacturers encounter chip shortages, which could lead to a shortage of devices and hardware. The current chip shortage is due to strong demand and reduced supply, with the Coronavirus lockdown resulting in many people working from home and transportation being limited. Whilst there are strives to improve the shortages now the pandemic has eased, there is still an ever-growing demand for the chips and simply not enough being made to meet it. Ukraine produces approximately 70% of the World’s neon and this has reduced exponentially since the Russian War on Ukraine. Neon is critical for the lasers used to make silicon, which is an essential material found in chips, further impacting global supplies. Working From Home Something that has become increasingly popular due to the pandemic is remote or hybrid working, resulting in more people working from home. This has led to more computer hardware being provided to home workers and higher use of cloud computing. Cloud computing has turned into the perfect solution for especially hybrid working as it allows resources to be accessed from any location. This shift in working culture however carries the increased risk of security breaches. The risk of a data breach is huge due to the number of people working from home; from people mixing personal devices with work devices, weak passwords, spam and unencrypted file sharing, there is a risk that a system can be compromised while remote working. The risk of data breaches has led to an increase in security solutions such as WatchGuard but also an increase in employees using work devices to separate from their personal, creating higher demand in a market already under extreme strain. Overall, the aftermath of Covid and the spike in demand has led to constraints and increased costs in the IT market. The market however continues to evolve and adapt. Amongst our loyal client base, Nike supports a wide cross-section of Public Sector and Educational organisations. We have seen many essential infrastructure projects brought forward in order to mitigate against industry constraints. Nike project management team have been working closely with our clients to ensure projects are planned out to a successful, timely conclusion.

Submitted by Ian from Nike Consultants Ltd
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