Published: June 25, 2020


Around the globe, enterprise IT priorities are evolving quickly in response to dramatic shifts in the market caused by the COVID-19 pandemic. Our Voice of the Enterprise: Coronavirus Flash Survey June 2020, conducted in late May and early June, gives vendors in the monitoring market reason to hope for sustained demand as digital engagement has spiked in overall importance, likely forever so.

The 451 Take

Since the reaction to COVID-19 has forced many businesses to rely exclusively or primarily on digital properties to generate revenue, we expected (and recent research underscores) solid continued demand for tools in the monitoring market. Of nine categories of IT investment that we asked about in our recent survey, the shift to digital experience had the highest response from those either having newly introduced or accelerated projects in this category (at 34%). We know it's not enough to simply release an app or service. Users demand reliable, functional apps, and monitoring tools are key to ensuring that apps perform as expected. App performance is more important than ever, now that an app may be the only channel for revenue generation. With the business itself on the line, the monitoring tools that support mission-critical apps are evolving from tactical to strategic.


Shift to Digital Customer Experience Accelerates

When we wrote about the impact of COVID-19 on the monitoring segment after our flash survey in March, we said that monitoring tools would continue to be in demand because many companies would need to shift all of their revenue-generation potential to digital properties. In that environment, apps and services have to perform well or risk impacting the potential to bring in revenue.

In our newest survey about the impacts of COVID-19, we found a significant acceleration of IT initiatives supporting the delivery of digital customer experience. Among the types of IT projects we asked about, including migrating workloads to cloud, data analytics projects and IoT projects, the shift to digital delivery of customer experience was the most likely to be introduced and exceeded all categories except security in terms of respondents that are accelerating project timelines (28% of respondents said they planned to accelerate the shift to digital customer experience and 29% planned to accelerate new information security tools and practices). Fewer than 1% had cancelled their digital customer experience projects and 7% had delayed such initiatives, with 20% having no digital customer experience initiatives.

We've also noted that, generally, the impact of COVID-19 is sector-specific, and this bares out in our latest research. The industries most likely to have introduced or accelerated the shift to digital customer experience are healthcare and government/education, sectors that relied heavily on customer interaction in physical settings prior to the pandemic and experienced a pressing imperative to shift to digital because of social distancing practices.

Sectors like finance and communications had no respondents with newly introduced digital customer experience projects since these sectors are likely to have already had customer-facing apps and services. (Note that sample sizes for some sectors, including utilities and communications, are small.)

We think this evidence of accelerated and continued development of apps and services bodes well for the monitoring and observability sector, since these tools will be crucial to ensuring app performance. In sectors like retail, where the bulk of revenue generation may be derived from online properties for many months to come, application performance is particularly important.

Vendors in the monitoring market have further reason to hope for the best due to expected continued appetite from most businesses for continued spend on IT. In our most recent COVID-19 survey, 31% of respondents said they planned to spend more on IT resources/assets and 51% planned no change in their spending. However, between our March and June surveys, we saw an increase among those who said they're spending less, from 3% to 19%. Still, as of June, more than 80% of respondents expect to retain their spending plans or increase spending.

While the recommendations that we made to monitoring vendors in the early days of the pandemic remain relevant, we now also recommend they consider injecting flexibility in payment and pricing plans to respond to evolving customer needs. We asked survey respondents if they were looking for adjustments to the payment terms, and one-third said they had asked or expected to ask for flexibility around things like payment schedules, pricing and payment models.

We've seen many vendors extend the time period for free trials, but our survey suggests that some businesses are looking for more substantive options that can help them weather the challenges they face as a result of the pandemic.

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Nancy Gohring
Senior Analyst, Application and Infrastructure Performance

Nancy Gohring covers application and infrastructure performance for 451 Research, including IT monitoring, application performance management and log management.

Liam Rogers
Associate Analyst

As an Associate Analyst in 451 Research’s Applied Infrastructure & DevOps Channel, Liam Rogers covers technology and business-model innovation across the enterprise storage landscape. His coverage includes hyperconverged infrastructure, software-defined storage and persistent storage for containers.

Keith Dawson
Principal Analyst

Keith Dawson is a principal analyst in 451 Research's Customer Experience & Commerce practice, primarily covering marketing technology. Keith has been covering the intersection of communications and enterprise software for 25 years, mainly looking at how to influence and optimize the customer experience.