Discretionary projects such as large-scale Tech Strategy engagements, large Tech Services engagements (outside of cloud migrations) and large Outsourcing deal activity continues to be pressured. End markets such as Media & Entertainment, Advertising, Travel & Hospitality, Oil & Gas, Government & Education continue to show weakness as articulated by the Technology Services firms that sell into those industries. Insurance companies are not big Technology buyers at the moment as they wade through COVID claims. Asset Managers are slow to execute large outsourcing deals.
- Some of this weakness is behavioral. For decades corporate buyers have executed large Technology deals with vendors through tough negotiations that require face-to-face meetings to move the ball beyond contract sticking points. This reality has not changed because of COVID (insofar as discretionary deals are concerned), nor because Consumers spent their stimulus checks in January.
- For many companies more pressing matters are at hand. Many corporate buyers remain tight with purse strings because they have more pressing matters to deal with such as when employees may return to the office and what that may look like in terms of the in-office, work-from-home mix as well as the associated policies and legal language. Other industries have suffered from volatility (Energy), have ground to a halt (Education) and have continued to shed expenses (Media). Thus, discretionary projects will remain on the back burner.