Covid-19’s Hit To IT Spending | A Cloud Price War | Unlocking Billions From Patents

Hi there and welcome to the first edition of the Forbes CIO Newsletter, our weekly briefing for tech leaders shaping the future of business.

One of the top priorities for CIOs right now is deciding where to make cuts in IT budgets. Some investments have already been delayed or scrapped altogether and that’s reflected in analysts’ increasingly gloomy forecasts: Gartner recently predicted that overall spending on IT products and services could be $300 billion lower this year than in 2019, representing an 8% year-on-year decline to $3.46 trillion.

Selecting where to cut and where to maintain, or even increase, spending is an incredibly challenging balancing act. First, it requires taking a view on the likely shape of an economic downturn and eventual recovery. That shape—whether it’s a “U”, a “V”, a “W” or a Nike-like “swoosh”—is likely to vary from industry to industry. Gartner’s prognosticators think it could be more than three years before IT spending recovers to 2019 levels in the hardest hit sectors such as hotels and airlines.

The next part of the balancing act involves being clear about what your core values and goals are as a company. This should help clarify investments that ought to be protected to advance the core mission. The third phase of the process is to work closely with C-suite colleagues and other business partners to ensure your company can adapt quickly to shifts in customer behavior and expectations, while at the same time boosting resilience and efficiency through work-from-home infrastructure, process automation and other tech-powered initiatives.

Like skilled surgeons, CIOs will need to wield their scalpels with utmost care in the weeks and months ahead. And, like those surgeons, they may well find themselves having to wear masks as they do so!

Thanks for reading and do please send me your tips, thoughts, questions and ideas for future issues at You can also follow me on Twitter and on LinkedIn.

Martin Giles

Martin Giles

Senior Editor, CIO Network

Technology & Innovation

Cloud computing: A new price war appears to be brewing amongst cloud providers as the Covid-19 pandemic roils the market. Oracle recently poached communications platform 8x8 from Amazon Web Services by offering it an eye-popping 80% price discount.

Microsoft: Talking of cloud computing, Microsoft held its annual Build developer conference this week—virtually, of course—and announced a bunch of initiatives including a new supercomputer available via Azure for powering machine-learning projects and Microsoft Cloud for Healthcare, its first industry-specific suite of cloud services.

Forbes spoke with CEO Satya Nadella, who said Microsoft sees the crisis as catalyzing new ways of working and plans to publish findings about its own experience of what he calls “this at-scale experiment."

Chip supply chains: Trade friction plus pandemic-fueled concerns over the security of tech supply chains could trigger more investment by chip manufacturers in the U.S. and other markets outside Asia. Taiwan Semiconductor Manufacturing Company (TSMC) is planning to invest $12 billion in a new fab in Arizona. Democrats in the U.S. Senate have called on the Trump administration to clarify whether TSMC is receiving government subsidies as part of the deal.

Intellectual property: Companies could collectively create billions of dollars in additional value if there were more tools around for maximizing the value of their innovations. A new patent marketplace being promoted by the U.S. Patent and Trademark Office could help.

Leadership & Strategy

The new workplace #1: Internet giants changed the way we work with their sprawling campus offices packed with amenities such as gyms and day care centers. Now they could influence how we all return to work in a Covid-19 world. Facebook plans to reopen offices on July 6 for employees who can’t work from home but will reportedly limit capacity to 25%. It will also institute temperature checks and social distancing measures, including keeping those gyms closed.

The new workplace #2: Twitter and Square, both led by Jack Dorsey, have announced that employees can work from home permanently if they want to do so. That raises a crucial question for leaders to consider: What might a company lose out on if most or all of its workforce bids farewell to the office for good?

M&A: Businesses often fail to appreciate the value of the data assets held by potential bid targets. Tech leaders have a key role to play in highlighting those assets’ true worth.

Customer insights: As consumers’ behavior and expectations are being reshaped by the pandemic, CIOs need to help CMOs keep abreast of these shifts. Implemented well, customer data platforms can help deliver timely intelligence to marketers.

Talent & Careers

Recruitment: When executives are hiring, they often screen job candidates for “cultural fit.” Yet there are several reasons why that practice can lead to a sub-optimal talent mix.

CIO on the move: Bed Bath & Beyond is trying to turn its fortunes around against the backdrop of a retail implosion triggered by Covid-19. To help it, the home-goods giant has hired Rafeh Masood as chief digital officer. Masood was previously the CDO of BJ’s Wholesale Club, where he drove its e-commerce and omnichannel efforts.

Coaching: The need for CIOs to coach their direct reports and wider teams effectively is more pressing than ever. A new approach, known as BASIC coaching emphasizes the need to spend much more time exploring particular contexts and situations before defining what a person wants to achieve and how to hit goals.

CIO Profile: Verizon’s Global Tech Leader Is Adapting The $232 Billion Firm To A Contactless World
CIO Profile: Verizon’s Global Tech Leader Is Adapting The $232 Billion Firm To A Contactless World

Shankar Arumugavelu, the global CIO of Verizon, has helped shift 115,000 employees to remote work safely and securely. To do so, he’s tapped a range of technologies, from augmented reality to digital-payment kiosks. His efforts hold lessons for other CIOs readying their companies for a radically different business landscape.

Read The Full Story →

"We’re working through how things should change. One key question we ask ourselves is: ‘How do we make this as contactless as possible?'"

Shankar Arumugavelu

Global CIO of Verizon


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