What is happening to companies, including software development vendors, during the COVID-19 crisis?
Coronavirus has turned the world upside down and caused a lot of shifts in economics.
Small, medium, large businesses are facing a lot of challenges. You must either modernize your business to keep afloat, or go under.
Hot Industries During the Coronavirus Outbreak
COVID-19 has divided companies into winners and those that are doomed to fall behind.
Offline business is struggling the most.
The global economy won’t come away unscathed.
- coronavirus will bleed $820 billion in revenue from the business travel sector
- the hotel industry is losing $1.4 billion in revenue every week
- the retail industry will lose $430 billion in revenue over the next three months
- the global economy will lose over $2.7 trillion
1. Delivery [key growing segment]
Еhere is a need for groceries. This dilemma has caused a spike in the popularity of on-demand delivery apps.
Due to the coronavirus crisis, Walmart Grocery and Shipt opened new business opportunities.
Amazon is also benefiting from COVID-19. The company has seen an increase in delivery services across all of its product categories.
GoPuff is our flagship project in on-demand delivery that operates in more than 90 locales, across 20 US states.
2. EdTech [streamlines online education]
UNESCO states that 516.6 million students can’t visit educational institutions. Just imagine it this way — this is about 91% of the world’s student population.
The pandemic is testing eLearning and its capabilities. The Chinese company Yuanfudao illustrates this interest in online education.
So, why not start a digital project in the EdTech area?
3. Pharmaceuticals [industry in demand of new initiatives]
Competition and demand have never been so tense within the pharmaceutical industry.
People are panic-buying a lot of medicine. In Australia, the government has even put restrictions on certain drugs.
A few companies have advanced their studies — Moderna is one of the most prospective leaders. The company has already begun human trials of a prospective vaccine for coronavirus.
4. Streaming, Entertainment, & Gaming [solutions with most the traffic]
The entertainment industry is on the rise due to the need for social interaction.
It is worth noting that, as a result, the European government asked Netflix and YouTube to lower their video quality. The solutions complied!
Online gaming is also going through an uptick, as companies have reported an increase in demand. YouTube game streaming has spiked by 15% already.
5. Healthcare [needs modernization & digitalization]
Hospitals cannot withstand the flow of COVID-19 patients. There are so many of them that the healthcare industry is at risk of failing. This is not to mention that doctors don’t have any time left for patients with other illnesses.
Many companies have started to release innovative solutions that aim to address the issues.
6. Productivity Tools [organize teamwork effectively]
Productivity and communication tools have certainly come in handy. Thanks to these tools, millions of employees have managed to create efficient working environments at home.
Zoom is a great example. Right now however, the price of its shares is over $150, which gives the company a market value of $42 billion.
7. Biotechnology [lucrative & life-saving sector]
Biotech companies could become the real saviors of the world.
There are a lot of companies working on a coronavirus treatment. These include CalciMedica, EpiVax, Inovio, and universities all over the world.
Victory waits for the company that can get FDA approval for their medicine.
8. Retail [need online distribution models]
The retail industry is in the middle of massive disruption.
Amazon is one of the most vivid examples. The company will not comment on any rumors, but 100,000 new job openings speak about the rise in demand.
9. Telehealth [projects worth investment]
Telemedicine apps are witnessing a huge spike in usage during the coronavirus crisis. Coronavirus has increased the number of appointments for PlushCare by 70%.
Trendy Digital Products During COVID-19
How do people survive coronavirus?
They definitely don’t live by bread alone.
COVID-19 has created a 180-degree turn in customer behavior. The resulting disruption has brought new winners into the spotlight.
Communication Tools
- Zoom
- Slack
- Microsoft Teams
- RingCentral
Remote Learning Platforms
A great example is GSX Techedu, a Chinese educational platform.
Video Streaming
The entire world is streaming video now more than ever. The revenue of giants like Netflix, Disney+, Hulu, and HBO continues to skyrocket.
Online Supermarkets
The online-only UK supermarket Ocado is a great example of a COVID-19 winner.
Home Fitness Apps
Peloton, the exercise equipment and media company, saw a 13% spike in share price due to this rising demand. Nike Training Club has offered free access to all premium workouts.
In general, organic traffic is down in most industries, like:
- News & media sites
- Food industry
- Healthcare
- Travel industry
On the contrary, the impact on eCommerce websites has not been as drastic, with less than a 5% drop in visits.
How Custom Software Development Companies Can Survive During COVID-19
What are some changes in the IT industry these days?
How can you choose a reliable IT vendor for software development during the coronavirus crisis?
In reality, software development companies rely on their clients and their businesses. The IT industry is not an exception in this economic downturn.
Many IT vendors state that their clients have put their mobile app and web projects on hold. In fact, 30% of companies report that the number of projects has fallen by 30–40%.
On the contrary, there are lots of software development companies that give out untruthful information. Many cut rates and offer discounts.
Some are declaring that they are making advances to their clients in order to support their projects in harsh times and share responsibilities.
However, just think logically. What business exists without profit?
Cutting costs and lowering rates or offering discounts on development services may hide particular changes inside the company.
In many cases, IT vendors may assign middle, or even junior, programmers instead of senior specialists on your project. As a result, senior specialists lose jobs since their salaries are the highest. Many IT companies just cannot keep these professionals.
Some IT firms, in order to withstand the coronavirus crisis, will agree on all the terms and conditions mentioned by the client just to get an agreement signed.
All in all, you can now witness a few distinct trends among software development companies.
- IT firms are closing down
- Letting go of senior developers
How can you distinguish between who is lying and who is not?
- Look at the number of employees and how that number has fluctuated over the last few weeks
- Find out how long the company has been on the market
- Look at the company’s portfolio (make sure that they have a few big projects in development)
- Ask if a team has long-term projects lasting 5+ years
- When discussing business, ask about the levels of seniority inside the company
- Ask how the company intends to cope with the current problems
- Study how the company works during the quarantine
How to be a Winner During Coronavirus in 2020
The image above depicts McKinsey’s 5-step recovery plan that your company could also undergo.
1. Resolve
2. Resilience
3. Return
4. Reimagination
5. Reform
To sum things up, here is what COVID-19 has brought:
- Travel, advertising, retail, and mobility are under the biggest stress ever
- Social distancing has sent consumers online
- The healthcare industry needs quick modernization
- Users are searching for telemedicine app services
- Solutions for productivity, communication, conferencing, and WFH are in demand
- Streaming, gaming, food delivery, health, and eCommerce are outperforming the market
- Stay cautious of dishonest IT software development vendors giving untruthful info
- Reimagine your business with new innovations and initiatives to become a winner
You could think about initiating your project in one of the following domains.
- On-demand delivery
- Pharmaceuticals
- Healthcare
- EdTech
- Streaming services
- Biotechnology
- Telehealth
- Productivity
- Retail
A wise strategy is to move your business online. As well, you should develop new innovative solutions and digital products. Nothing should stop you in the rush to retain loyal customers, and even gain new ones, in this new reality.
This is a summary of an article.
Check out more details and recommendations to survive the COVID-19 crisis inside the complete article on the MLSDev blog.
