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Thursday, 13 February 2020 01:57

Vendor opportunities in China amidst coronavirus outbreak, says analyst Featured


The outbreak of coronavirus in China offers a unique opportunity for vendors offering communications and collaboration services, according to one global analyst firm which says that organisations, need to continue to collaborate to remain productive.

“While the Chinese Government continues to scuffle with the coronavirus outbreak and find a remedy, the situation has provided a formidable product pitching background for the leading technology vendors offering communications and collaboration services,” says GlobalData.

According to GlobalData all the sectors are currently feeling the impact of the coronavirus, with manufacturing companies closing offices, stores, and factories across China as well as restricting employees from non-essential travel to the country.

Amidst this backdrop, the analyst firm says leading companies having a presence in China are striving to continue with business as usual, and employees at Google have been asked to either work from home or extend their Lunar New Year holiday, while companies like Goldman Sachs, HSBC, and Standard Chartered, Procter & Gamble have allowed their employees (to work) who are returning from China with remote working benefits.

Amidst the scenario, with organisations promoting remote working, there is expected to be an exponential rise in the video calls/phone calls, as an increasing number of people will be organising client meetings and internal team briefings via apps or collaborations platforms.

Sunil Kumar Verma, Lead ICT Analyst at GlobalData, said: “The outbreak of coronavirus in China offers a unique opportunity for vendors offering communications and collaboration services. However, organisations need to continue to collaborate to remain productive.”

GlobalData estimates the overall communications and collaboration spending in China to be approximately US$40.8bn in 2020. Of this, ‘services’ are estimated to account for 91%, whereas software/applications are forecast to account for 8%. This can significantly go up, depending on how long the outbreak continues.

“The overall data traffic on the telcos network is expected to surge exponentially, as companies will interact virtually with their counterparts in the outbreak affected regions. A large section of these people will be discussing on videochat apps or other productivity software/platforms like WeChat, Skype and Zoom,” Verma said.

GlobalData says the share prices of Zoom surged significantly in early February 2020, amidst the growing inclination of the increasing number of companies emphasising on reducing the business travel and sifting to online services offered by these collaboration services providers.

Other prominent collaboration software/platform providers such as LogMeIn, Fuze, WebEx, and ‘Whereby’ are also expected to benefit from the need for an effective collaboration mechanism between the remotely located teams - and even China-based communication and collaboration vendors are expected to benefit from these developments.

Tencent's cloud-based video conferencing service- Tencent Meeting (in addition to WeChat), DingTalk operated by AliBaba and WeLink offering from Huawei are some of the prominent offerings from the domestic players.

Verma concludes: “With increasing number of employees staying connected and collaboration tools becoming ubiquitous, collaboration in the enterprises is becoming essential. Also, these new age collaboration tools support cloud based deployment features, enabling the enterprises to scale up the capabilities quickly during the peak periods. Despite the challenges of the outbreak, the current situation offers a mutually beneficial scenario for both the vendors as well as potential clients under a real-world use-case scenario, until the coronavirus outbreak is brought under control.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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