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Enterprise technology firms say companies are emerging from survival mode and kick-starting pre-Covid-19 efforts to overhaul their operations with digital tools.
“Businesses can’t wait,” says Alvina Antar, chief information officer at cloud-identity and -management company
Okta Inc.
Ms. Antar, who took on the role six weeks ago, said companies that raced to install remote-work applications during Covid-19 lockdowns are now doubling down on long-held plans to expand the use of cloud computing, data analytics, smart software and other tech capabilities.
“Yes, they scrambled on the workforce side,” she said. “If they didn’t have that, the business would crumble.” But companies also need to prepare for fierce competition in a post-Covid market, she added.
Like many information-technology providers, Okta is in a unique position to gauge the pace of that shift firsthand. The Silicon Valley company, with twin headquarters in San Francisco and San Jose, sells technology that links a company’s business apps together in one place—much like a central switchboard of digital enterprise tools.
Okta Chief Information Officer Alvina Antar
Photo:
Okta Inc.
Since March, Okta has signed up 1,000 new corporate customers, bringing total users to 8,950. In the quarter ending July 31, revenue rose to $200.4 million from $140.5 million in the year-ago quarter.
“Once you learn that you can move all your users to work from home in days, rather than years, you start thinking about what else you thought was too hard to do,“ said Orion Hindawi, co-founder of cybersecurity company Tanium Inc.
Mr. Hindawi said that includes migrating all critical applications to the cloud, or throwing out legacy security software and reimagining it, among other moves.
Don Schuerman, chief technology officer at software maker
Pegasystems Inc.,
said there is “no putting the genie back in the bottle now.”
He is also seeing digital transformation accelerate across the board: “Executives who lamented the slower pace of information-technology change now feel vindicated,” he said, citing the ability of digitally advanced companies to quickly spin out emergency business-continuity tools during the crisis.
The rise of digital-business models predates the pandemic, reflected in how quickly organizations were able to pivot to telemedicine, online learning and remote work, according to Kristin Moyer, research vice president and distinguished analyst at technology-research firm
Gartner Inc.
But in its wake, nearly 70% of corporate boards cite the impact of Covid-19 for a ramp up in spending on IT and digital capabilities, according to a Gartner analysis this month.
Gartner forecasts global IT spending to reach just under $3.7 trillion next year, up 4.3% from 2020. Within total spending, investment in cloud-based IT infrastructure is expected to surge 27.6%, to $64.3 billion in 2021, Gartner says.
The goal for companies, Ms. Moyer adds, is to enhance customer engagement and generate revenue by driving “a higher proportion of business through digital channels.”
According to a recent survey by consulting firm McKinsey & Co., roughly half of 800 global business executives said the pandemic has prompted their firms to accelerate the implementation of e-commerce tools, mobile apps, chatbots and automation.
A majority of the companies responding to the survey had more than $1 billion in revenue, McKinsey said.
“It’s caused nearly all of our customers to re-evaluate the infrastructure behind their digital business, making it more resilient and flexible to weather future change,” said Chris Sharp, chief technology officer at Digital Realty Inc., a data-center operator with roughly 4,000 customers.
They include
Amazon.com Inc.’s
Amazon Web Services,
Alphabet Inc.’s
Google Cloud,
International Business Machines Corp.
and other large cloud-service providers, as well as banks, retailers and businesses outside of the tech sector.
Mr. Sharp said the pandemic has accelerated its customers’ timelines for digital expansion by two to five years or more—from on-demand deliveries to touchless in-store shopping.
Edward Hieatt, a senior vice president at cloud-software maker
VMware Inc.,
said he expects many organizations to capitalize on the momentum Covid-19 has generated to take the next step in modernization plans—to better respond to whatever comes next.
“Whether it’s a pandemic, economic downturn or a new competitor,” Mr. Hieatt said.
Write to Angus Loten at angus.loten@wsj.com
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