Bill Gates, Microsoft’s Co-Founder famously said, “If your business is not on the internet, then your business will be out of business.” It sounds true in the post-pandemic era. From countries to individuals, COVID-19 has taken a toll on everyone and everything. Thankfully, the tech industry was ahead of the COVID curve from the beginning. It was the first to send the workers home and even to cancel crowded events. It was also a forerunner in introducing new tech. Much of its business was on the internet, after all! In this article, we’ll discuss more on how COVID-19 has transformed the tech industry in 5 ways.
Stewart Marshall is a commercial software strategist and SaaS extraordinaire. He thinks that COVID-19 has forced digital transformation upon Australia. In fact, he considers it to be a gift to the tech industry.
“Whether we like it or not, we have been dragged kicking and screaming into the modern era. The old normal is no more. What the new normal will end up being is still up in the air. The world’s changing and we are beginning to make the best of it.”Stewart Marshall
There have been positive changes. Examples include the Big Tech like Facebook, Amazon, Apple, Netflix, Google. The stocks of these companies rose during the period. However, things were different for some tech-based companies like Airbnb. In fact, it lost about 80% of its business in a matter of months. Let’s be honest and say ‘it’s all contextual’ as it entirely depends on the business and its offerings. Global hospitality services will suffer amidst travel bans. On the other hand, in-home streaming services will see increased subscribers because of lockdowns.
5 ways in which tech industry transformed
Blurring this distinction between the good and the bad, today we explore the impacts COVID-19 has had on the tech industry:
1. Acceleration of Tech Evolution
Demand for composite artificial intelligence (AI), augmented reality (AR) and virtual reality (VR) scenarios, e-learning, telemedicine, robotics, intelligent chatbots, digital payments, virtual retail experiences have increased.
Global Artificial Intelligence (AI) software revenue is forecast to reach $62.5 billion in 2022. It is an increase of 21.3 per cent from 2021, as per Gartner. The same Gartner report also predicts that it will take until 2025 for half of the organizations worldwide to reach the ‘stabilisation stage’ of AI maturity or beyond.
The adoption of Augmented and Virtual Reality has also seen a significant rise over the period. The augmented reality and virtual reality market for the retail industry alone are expected to reach $2,094.08 billion by 2027. It will see market growth at a rate of 68.5% in the forecast period of 2020 to 2027.
It seems as if it took a pandemic to bring home the power of digital technology and the possibilities it opens up. According to a new McKinsey Global Survey of executives, companies have accelerated the digitization of their customer and supply chain interactions and of their internal operations by three to four years. Similarly, the share of digital or digitally enabled products has accelerated by seven years.
The demand for products and services delivered by the tech industry is going to rise further. This could accelerate the tech evolution in ways never thought of before.
2. Development of Productivity Software
Communication is a prerequisite for a company’s success. But how do employers and employees communicate when remote work becomes a norm? Well, they use teleconferencing tools like Skype, Zoom, and Microsoft Teams, Google Hangouts Meet, and WebEx Meetings. Prior to the pandemic, most companies considered these to be add-ons and not necessities. Companies that had off-shore branches were the exceptions.
The pandemic changed it all. Take Microsoft Teams as an example. In 2021, Jeff Teper, Corporate Vice President of Microsoft Teams tweeted, “Microsoft Teams now has 145 million active users.” This was a giant leap from its numbers in the previous year. Similarly, Zoom quickly became people’s go-to solution during the pandemic. Its share price soar nearly 400% in 2020 due to skyrocketing demand.
COVID-19 accelerated the use of such tools. The numbers are expected to rise further. The video conferencing market is expected to surpass $50 billion by 2026. Video conferencing is expected to account for 50% of the remote work market over the next five years. It stands at 10% to 15% currently.
This overwhelming demand for these services has accelerated because companies in every sector have had to adapt to the challenges posed by remote working and distributed workforce. Arun Sundararajan, Professor at the NYU Stern School of Business puts it succinctly.
“Crisis can be a catalyst or can speed up changes that are on the way—it almost can serve as an accelerant.”Arun Sundararanjan
3. Need for Cloud Based Services
The age of ‘cloud computing’ lies ahead. Satya Nadella, Microsoft CEO agrees.
“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”Satya Nadella
In 2019, cloud migration was just starting out for most businesses. In a 2019 research conducted by Accenture, it was found that on average enterprises only had 20-40% of their workload in the cloud even though 90% of the enterprises had adopted some form of cloud technology. It was a start nevertheless.
As per a study conducted by LogicMonitor, 87% of global IT decision-makers believe that Covid-19 would cause organisations to accelerate their migration to the cloud making the pandemic a de facto catalyst for the accelerated adoption of cloud computing. In the third quarter of 2021 alone, enterprise spending on cloud infrastructure services reached approximately US$ 45.4 Billion.
Cloud technology is now at the core of a company’s engagement with its employees and customers. It allows for ideation, development, delivery and implementation of solutions for the clients through remote interfaces and automation. No wonder the revenues for cloud providers such as Microsoft, Amazon Web Services (AWS), AliCloud and Google Cloud Platform have grown between 25% and 100%. This growth has shown transformative results including efficiencies and innovations that drive enduring business change.
4. Increase in Vulnerabilities
Security is becoming a major concern. As per Cyber Security in the New Normal, a report by Skybox Security, 73% of C-level executives are concerned that remote work has introduced new vulnerabilities and risks. It is especially true in sensitive areas such as operational technologies and network devices.
As per a 2020 report by Gartner, “Over the last 18 months, an increasing number of vulnerabilities impacting a wide range of cyber-physical systems have been disclosed, This is a trend which is likely to continue into 2022 and beyond.”
The security solutions used in the wake of the pandemic are now being re-evaluated by many companies. Services being evaluated include but are not limited to, data protection, secure back-up, and document retention and compliance. Security of confidential information while allowing for remote work is going to be equally important moving forward.
The onset of pandemics meant companies needed to focus on being resilient. But as the new normal sets in, managing risks and vulnerabilities is going to be vital. This will help drive successful outcomes and innovation as the global economy recovers. As a 2021 report highlights, enterprises need precise, exposure-based solutions that cut through the noise, pinpoint the real security threats, and enable practical, cost-effective remediation.
5. Need to Retain Skilled Workforce
According to the U.S. Bureau of Labour Statistics, 4.3 million Americans quit their jobs in August 2021. Management Professor Anthony Klotz coined this as the ‘Great Resignation’. He says that the phenomenon is fueled by the increase in remote and hybrid work. And these resignations are highest in the tech and health care industries.
“Workers being able to quit their jobs to take better jobs is a very good thing and signals an economy with healthy dynamism. The dynamic we are seeing of a high quits rate combined with strong job growth is absolutely something to celebrate.”Heidi Shireholdz
So, where are these jobs moving? Talented developers and engineers are high on demand. With companies seeking business solutions to address remote work, social distancing and the need for in-store alternatives, they are the go-to people. And how are companies retaining this top talent? One solution is allowing them to work from home.
Square following Twitter’s lead was one of the forerunners in letting people work from home. Facebook also made a permanent move to remote work. According to a study conducted by Trust Radius, 57% of business professionals reported they are more productive now while working remotely than they were before the pandemic. With data backing up their move, these companies and many others don’t seem to be in a hurry to get employees back to the office cubicles. As the threat of Omicron looms large, this might as well all be the best.
Technology is at the forefront of industries going through dynamic change due to the COVID-19 pandemic. We cannot undermine the sector’s essential role in critical infrastructure. The Tech industry has also led the way on a variety of strategies. Other industries are now using the same strategies to cope with the crisis. Such strategies range from remote working to a globally dispersed supply chain to managing through disruption. Business mirrors biology and as Charles Darwin said, “those who survive are not the strongest or the most intelligent, but the most adaptable to change.”