Conference Cancellations: Coronavirus Fears or Supply Chain Uncertainty?

Photo credit: iStockphoto/fizkes

As 40,000 attendees descend on San Francisco for the annual security pilgrimage that is the RSA Conference, yet another large sponsor, Verizon, pulls out of the event citing safety concerns over the Coronavirus (Covid-19) pandemic. Verizon follows fellow tech giants, AT&T and IBM, in withdrawing from the RSA Conference, just days away.

Global tech conferences take a hit amidst pandemic concerns

Recently, Facebook cancelled its San Francisco-based marketing summit over health and safety concerns, and both Facebook and Sony have decided to skip the Game Developers Conference on March 16-20.  Globally, tech conferences are taking a huge hit. For example, the Mobile World Congress scheduled for February 24-27 in Barcelona has been cancelled. The March 4th Salesforce World Tour Sydney will now be held as a live stream event. EmTech Asia  on March 24-26, and Black Hat Asia on March 31 – April 3, both in Singapore, have been postponed to a later date this year.

With so many international events that fuel the industry’s sales pipeline being cancelled or postponed, one might think the security and technology industry would consider the RSA conference as a “Hail Mary” play to save their annual sales. Yet, as sponsors continue to pull out of RSA, it begs the question whether their decisions are indeed fueled by safety concerns or could they be driven by fears of supply chain instability – which for high tech and telecom is heavily concentrated in Asia, predominantly in China.

Most global businesses are unprepared for a pandemic

This pandemic, while devastating, should serve as a wake-up call to an entire global economy that supplier concentration is a risk that shouldn’t be underestimated. Frightfully, most organizations don’t have a pandemic response plan, nor a business impact analysis for what a pandemic could mean for their global supply chains. And many business continuity plans still overemphasize technology disruptions as the most common scenario and technology as an all-encompassing risk mitigation and response solution. 

Supply chain risk meets reputational risk

The Coronavirus pandemic has put restrictions on Chinese manufacturing, many of whom are still closed or running far below capacity.  For Tech giants like Apple that depend on China’s supply chain for everything from computer chips to cell phone parts, the ripple effect means cutting revenue projections. Supply chain disruption is not just an Apple problem.  Looking at the major sponsors pulling back from RSA, the IBMs, AT&Ts, and the Verizons of the world are also heavily dependent on Chinese goods and labor.

For brands that have put so much effort and money into building a reputation for trust, being able to over-promise and under-deliver would be devastating. With so much at stake in the battle for customer loyalty and uncertainty around resilience of their supply chain partners, companies must decide whether to add reputational risk to the mix or to sit this one out. As IBM, AT&T, and Verizon are choosing to sit this one out, will more follow suit?

The original article by Forrester's analyst Alla Valente and principal analyst Renee Murphy is here. The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Photo credit: iStockphoto/fizkes