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Summary
Over recent weeks, the tariffs imposed by the US, particularly those targeting China, and the retaliatory tariffs other countries are placing on American goods, have led to global economic turmoil. This analyst opinion explores the impact on the enterprise business application market.
Business will look to mitigate tariff impacts through digital flexibility
The most obvious implication for enterprises is that of the increased costs for important infrastructure components that support business applications. Technologies such as servers, networking equipment, and devices play a vital role in supporting applications and enabling productivity. This is a more notable issue for businesses relying on on-premises or hybrid deployments, where the increased costs may delay digital projects that are reliant on this on-premises infrastructure. There will certainly be further scrutiny from businesses and budget holders around IT infrastructure and application spend, causing organizations to reassess their digital investments against the backdrop of a volatile global economic climate. Vendors should tailor their go-to-market approach around how their capabilities can help businesses better understand digital and IT-related costs and reduce spend in these areas.
The global supply chain disruptions that these new tariffs are creating also bring business continuity back into focus. While it has always been an important strategic area for businesses and IT teams, business continuity was a significant area of focus during the COVID-19 pandemic as businesses looked to mitigate disruptions by ensuring employees could work productively and collaboratively en masse from remote locations. However, in light of the new tariff challenges, digital operations resilience and deployment flexibility have now become even more important from a business continuity perspective. This is because the consequences of imposing tariffs on physical goods will ultimately ripple through the entire digital supply chain. Businesses must adapt quickly, evolving digital workflows to address factors such as new supplier and service procurements, as well as compliance requirements. This is an example of business continuity in action, where workflow agility is fundamental to its success. In much the same way as the business continuity conversations during the pandemic were focused on enabling businesses to cater for more flexible work styles, the focus of continuity conversations is now on enabling flexibility in how and where technology and business apps are deployed. Additionally, strengthening resilience to macroeconomic, regulatory, and geopolitical shifts is also vital.
How vendors can help businesses thrive amid tariff turbulence
For vendors providing workflow automation and digitization solutions, the turbulence surrounding the tariffs has highlighted one of the most important use cases their solutions can support: delivering technologies that help businesses develop and maintain robust continuity in times of disruption. Equally crucial is preserving customer trust by managing costs effectively and providing a sense of predictability amid uncertain economic conditions.
With the growing fragmentation of the global economy, businesses are increasingly wary of scaling operations and managing unpredictable costs tied to business applications and broader digital initiatives. A consistent media narrative throughout the tariff turmoil of recent weeks has been focused on the level of risk now associated with globalized trade. Recognizing and addressing these pressing economic challenges should be a priority for technology vendors. Business continuity has been brought back into focus, though not solely tied to disaster recovery as in the past. Vendors must demonstrate how their solutions will empower businesses to operate with greater agility and responsiveness, enhancing resilience in the face of economic and geopolitical changes.
Tariff challenges present a huge opportunity for vendors engaged in strategic partnerships
As enterprises increasingly explore ways in which they can be more agile in how they deploy business applications and manage suppliers, there will be an opportunity for vendors to partner in supporting this need. In recent years, there have been collaborations in the business applications space between the likes of ServiceNow and Microsoft, and Salesforce and AWS. This trend has been positive in paving the way for streamlined and richer integrations between tools that support both digital and business needs effectively.
For vendors engaged in these partnerships, there is now an opportunity to more closely align their integrated value propositions with pressing business needs around continuity and agility. By working together to leverage capabilities such as deployment flexibility, workflow automation, and supply chain resilience, vendors can offer joint solutions designed to address the challenges businesses face. Additionally, emphasizing not only technical prowess but also the ability to deliver outcomes that bolster business resilience and continuity has never been more important for vendors in the current landscape.
Appendix
Author
Adam Holtby, Principal Analyst, Workplace Transformation
