The Silicon Valley Bank Collapse: How Will Your Tech Spending Be Affected?

Not a depositor or investor in SVB? Changing outlooks, combined with inflation, might still result in reduced IT spending in your neck of the woods. Learn how third-party software maintenance can help.

You don’t need a big tech portfolio to be a bit unsettled by what went down at the Silicon Valley Bank (SVB) over the last week.

The ripple effect of this world-shaking event is real, and the outcome will impact IT departments in several ways. Getting out the crystal ball, it’s easy to predict one highly relevant business outcome right out of the gate: companies will be a lot more restrictive with their software spending.

While it’s hard to say precisely what the business landscape will look like post-SVB, the conservative spending trends and technology outlooks that will stem from it — combined with inflation — are going to require some adjustments to the way IT departments allocate and utilize their funds.

EXAMINING THE BUSINESS IMPACTS OF THE SVB COLLAPSE

It’ll be a while until the business world sees the specific effects of the SVB collapse. However, it’s fair to assume that certain reactions are already well underway, according to Moneycontrol. The website forecasts longer sales cycles and delays in the actual budget cycle for this calendar year.

“This comes amid a challenging macro environment when companies are pointing out extended cycles and increase cost optimization deals,” Moneycontrol states.

The website also indicates institutions in industries such as banking, insurance, and — due to reactions of the previous fields — technology might see an immediate impact. And based upon that, it’s not hard to imagine a more conservative technological and financial outlook shifting IT budgets across industries.

First, with companies already spending up to 90% of their IT budgets simply keeping the lights on, cuts to tech spending can ultimately equate to operational problems. And flipping this the other way, it’s easy to see how startups, stuck in quagmires due to disappearing banks and increased cost optimization deals, might need to pass their added costs on to consumers (where possible) simply to stay alive.

Then there’s innovation, which inflation has already had a stifling effect on in recent months. Simply put, the ability to do compelling new things also suffers when tech budgets and outlooks tighten up. Remember, technology doesn’t just fuel growth or innovation; it’s a critical player in both.

Finally, taking this thought a step further, organizations with changing tech budgeting and innovation needs, including those brought on by a unique bank collapse, will likely also require technology support and guidance if the status quo will no longer see them through. While not necessarily a direct outcome of the SVB closure, it’s a need worth anticipating as ripples continue to roll through the markets.

HOW THIRD-PARTY SOFTWARE MAINTENANCE CAN HELP SIDESTEP FINANCIAL UNCERTAINTY

In this business climate, customers need to do more with less. Now, more than ever, it’s crucial to optimize your current tech stack to maximize your budget. Third-party software maintenance can help with that goal.

A way to sidestep IT cost concerns. Using third-party software maintenance can result in a budget savings of up to 50%.

Likewise, more funds availability means more room to innovate and grow looking beyond simply keeping the lights on in tough times.

More choice over your upgrade path and tech stack. Because third-party software maintenance extends the viability of IBM® products, including maintaining legacy software your company has perpetual licenses for, there are ways to protect yourself from forced upgrades and unnecessary bundles. That’s a big deal any time, but especially when you suspect your tech budget may soon be (further) restricted in some manner.

YOU DON’T HAVE TO GO IT ALONE

As of this moment, the SVB situation is less about prescribed reactions to prescribed outcomes and more about uncertainty, including figuring out how to manage, mitigate, and work around it.

And let’s be completely honest — in business, there’s no uncertainty worse than financial uncertainty.

Third-party software maintenance providers have gained ground in enterprise tech environments because they shore up gaps inherent to the process. With Origina, for example, that includes providing a concierge level of service — you get the same experts every time, not just whomever happens to be by the phone — and direct access to global independent experts who care about how your software furthers your organization’s growth. They don’t stop at your software’s perimeter.

That level of support can be an amazing resource even in strong economic times. But nowadays, it will be an invaluable source of technical knowledge that aids your strategic growth and operational capability.

It’s impossible to predict direct outcomes from the historic SVB closure. On more general terms, however, it’s fair to assume the business world will react to unfavorable news with conservative outlooks. When world events directly impact a company’s ability to spend on growth and innovation, third-party software maintenance opens doors and frees costs IT leaders might have considered closed.

LEARN MORE ABOUT THIRD-PARTY SOFTWARE MAINTENANCE FROM OUR TEAM. GET STARTED HERE.