Networks Hold Up Under Coronavirus, But Pipeline Challenges Loom

Internet Network

Nearly a month after the coronavirus forced businesses to shift millions of employees to remote work, North America’s infrastructure is holding up, with some signs of strain.

Technology executives have expressed concern about whether local internet nodes can support the increase in traffic being generated from home workspaces. “The infrastructure of the internet and various cloud-hosted services will be tested like never before over the next few months,” wrote MJ Shoer, an industry consultant based in Portsmouth, N.H. “I have heard some reports of local internet nodes getting overwhelmed by the dramatic increase in traffic.”

As the #coronavirus forces businesses to shift millions of employees to remote work, North America’s infrastructure is holding up, with some signs of strain. #HR #HRTech #RemoteWork Click To Tweet

Several steps back from the last mile, internet exchanges reported record traffic as more users signed on to work or stay in touch with friends and family. Kentik, a network operations firm based in San Francisco, saw a “roughly a 200 percent increase in video conferencing during working hours” in North America and Asia, according to Data Center Frontier.

Internet exchanges are the physical infrastructure through which traffic passes as it moves between networks around the world.

Hardware Pipeline Delays

The shutdown of manufacturing centers throughout Asia has significantly disrupted the technology supply chain and delayed delivery of hardware components ranging from laptops to servers and routers, Shoer said.

While production has resumed in many places, managed service providers and others involved in the sales channel are concerned that delivery challenges could take place during the summer. Companies up and down the supply chain have warned that challenges seen in the first quarter could “leak into” the second, said MarketWatch.

At the same time, technology leaders hope “a seriously disastrous impact on the global technology supply chain” will be avoided if China’s factories return to service around the end of March.

Some parts of the supply chain are more automated than others, but “the entire complex organism is far from cured,” MarketWatch noted. In addition, it said, how intensely the coronavirus will continue to spread is uncertain.

Sales Grounded… for Now

Hardware and network issues aside, the coronavirus is bound to impact the business of cloud-solutions providers, including those in the HCM technology space.

Some Wall Street analysts have revised their estimates for enterprise software companies, according to Barron’s. These businesses aren’t vulnerable to supply-chain disruptions, but they’re sure to be impacted by the economic slowdown caused by the virus.

The pandemic will impact vendors’ ability to close business in the short term, believes Citigroup Global Software Analyst Walter Pritchard. “High-touch sales models” will be hurt by cutbacks in travel and the cancellation of trade shows, he said. He believes companies with greater proportions of recurring revenue will suffer less because their products require less selling.

Is the coronavirus impacting your company’s business? Send us an email and let us know.

Sign up for our newsletter here.

Image: iStock