Manish Jain | Source | Principal Research Director at Info-Tech Research Group
Manish Jain
Manish is a seasoned strategy professional with nearly two decades of professional experience in formulating corporate/unit strategy, technology strategy, architecture, and design and executing digital agile programs.
Before joining Info-Tech, he helped banking, credit rating, and life sciences clients solve business problems and unlock new opportunities through digital frameworks and technologies.
Besides leading digital transformation programs, he also served in corporate development roles as the BFS Business Unit Strategy Lead and Head of Global Sales Strategy and Operations for a $1 billion digital services organization.
At Info-Tech Research Group, he is responsible for strategic research and advisory on subjects related to IT strategy, digital strategy, IT funding models, innovation, and intrapreneurship.
He has been a certified cloud architect across all three major hyperscalers and an agile practitioner.
Outside of work, he is a board member for the non-profit IIM Alumni Canada (IIMAC).
Manish earned a Bachelor of Technology (BTech) in computer science and engineering and a PGDM (MBA) in strategy and finance from IIM Ahmedabad.
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Info-Tech Research Group
Principal Research Director
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U.S. Tariffs Threaten IT Budgets and Global Tech Ecosystem
Manish warns that U.S. tariffs on Canadian, Mexican, and Chinese exports are causing global market disruptions. "IT budgets face pressure from rising hardware costs," with potential price hikes of $200-$350 per unit. Software and service sectors may also see increased costs due to supply chain effects and restrictive immigration policies, straining IT departments.
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How U.S. Tariffs Are Reshaping IT Strategies
“The U.S. tariffs on Canadian, Mexican, and Chinese exports have rattled the global markets and North American businesses. CEOs, senior executives, and investors are compelled to reevaluate their strategies, and they must now prepare for potential disruptions to operations and cash flow. What was once considered an unlikely scenario has now shifted to a question of how to survive it, rather than if it will happen.
While the full impact of these tariffs will unfold in the coming weeks, technology leaders like CIOs, and CTOs - like their colleagues C-suite - must proactively act. They need to assess how this will affect the IT departments and formulate strategies to manage any likely risk.
In my opinion IT will be impacted in three ways:
1: The changes in organizational revenue and profitability will directly influence IT budgets.
2: Rising costs of hardware and software will reduce its spending power.
3: Uncertainty around services and already constrained immigration policies will increase its project risks.- > Impact on Hardware and Equipment
The 25% tariff on Canadian and Mexican goods combined with a 10% tariff on Chinese exports could significantly drive up the cost of technology hardware and equipment. The final price impact will not be limited to the tariff rate (25%) but exceed it because of supply chain effects. For example, laptops, tablets, and smartphones could see price hikes ranging from $200 to $350 per unit.
While electronic goods account for only about 3% of Canada’s exports to the U.S., this surge in costs would primarily be due to China’s dominant role in global electronic manufacturing. China currently accounts for nearly 80% of laptop and tablet imports into the U.S.
Additionally, the deeply interconnected North American supply chain means that many products, not only automobiles but also electronic goods, cross borders multiple times before reaching completion, further complicating tariff-related price increases.
Moreover, IT departments facing imminent hardware refresh cycles will be the most affected, as tariff-induced cost spikes could strain their budgets. On top of that, many CIOs should also prepare themselves for difficult discussions with hardware vendors, which may want to increase the discussion about price increases for their service contracts, which are generally part of hardware contracts.
- > Impact on Software and Services
While the immediate impact of tariffs is primarily on goods, meaning IT hardware, as no direct tariffs on software have been proposed, the broader technology services sector, including Independent Software Vendors (ISVs), Cloud Service Providers (CSPs), and System Integrators (SIs), may not remain unaffected.
The interconnected nature of the technology ecosystem means that software companies incorporating hardware components in their Software Bill of Materials (SBOM) will face rising development costs. Similarly, system integrators that depend on a steady flow of talent across borders are already experiencing challenges due to increasingly restrictive immigration policies worldwide. This will, in turn, drive up the cost of delivering technology services to U.S. organizations.
Moreover, many of the System Integrators and IT consulting organizations have leveraged Canada and Mexico to execute their near-shoring and friend-shoring strategies. These strategies will be tested now. They will feel the atmospheric pressure of moving the talent back to the client site to mitigate the risks of any US tariffs on IT services if the US administration decides to target them.
As a result, cost pressures on businesses—and by extension, IT departments—are likely to intensify in the coming months and years. Even if tariffs prove to be short-lived or less extensive, ongoing policy uncertainty from the US administration and potential reciprocity from other governments will deter capital investments globally. This hesitancy towards investment will constrain long-term technology spending."