As the world comes together to battle our “invisible enemy” (COVID-19), we find ourselves not only dealing with the reality of today, but start thinking about how our future will be different both at home and at work. According to FEMA, 90% of smaller companies fail within a year unless they can resume operations within 5 days and 25% of all businesses do not reopen after disasters. While the Federal Government has approved the $2.2 Trillion Cares Act, for some it may be too late and may not cover some businesses, particularly those that had just started or larger businesses. While this situation we are in today is not a typical disaster that we have seen in our lifetime, this epidemic could increase these numbers dramatically for those companies that are not able to mobilize quickly. Information is everything, and how a company is prepared to process information during a disaster very well could be its tipping point.

Businesses across the world are directly facing the implications of their past technology decisions. This has never been more evident than in the calls we (PTP) have received as a result of this unprecedented epidemic. The companies that have not adopted a cloud-first strategy (IaaS, SaaS, PaaS) have struggled to quickly mobilize and optimize their employees to work from home. They have had the challenge of dramatically expanding their VPN capabilities, ensuring adequate network capacity to their data center for the expanded remote work force, enabling a communication and shared work model for the entire “new” remote workforce, and upgrading/repairing/replacing components in their data center. Companies have quickly come to realize is that this all could have been minimized and even completely avoided if they had adopted the cloud.

“By moving to the cloud a couple years ago we have been able to handle the almost 15 fold increase in claims we have seen.” Governor Baker in his COVID-19 public update to the Commonwealth of MA on March 26, 2020 regarding the Commonwealth’s ability to handle the surge in unemployment applications in the past week (staffing went from 50-300 in 2 weeks).

Those companies that had truly adopted the cloud have seen an almost seamless transition to this new business model. While they may be impacted from a revenue perspective due to the pandemic, their operations were able to continue without a hitch. They have been able to immediately reduce expenses by turning down non mission critical systems that are hosted in the cloud and reduce license counts for SaaS applications, all while providing a seamless end user experience. This has not only had a direct impact on the bottom line, but has helped employers retain employees during this crisis that they otherwise would have had to furlough or terminate. This has had several advantages for the company including increased employee loyalty and great public relations that they are able to retain and pay employees longer.

This new work from home business model may also become the norm. Much like we had a virtualization first strategy in the early 2000’s for IT, some businesses are already thinking they may move to a “work from home first” strategy. Prior to this epidemic, one customer was looking to expand in to an additional 10 floors in a new building to meet their growth projections just this year. They have been monitoring the effectiveness of this work from home time and are considering they may dramatically reduce their building expansion plans and have more people work from home. This will significantly drive down their long term debt and could allow them to hire from a larger qualified pool of candidates from any region of the country

I hope and pray that this is an isolated and one-time crisis. However, the odds are that this will happen again. While we continue in these uncertain times, we have to start planning for the new future. Roughly 80% of the US economy is service based. Businesses must be able to sustain their services and be prepared to deliver their service in new ways. While many people know that cloud technologies allow you to become more agile, adopt an anytime, anywhere, from any device IT strategy, they also allow you to “get to no” faster and cheaper. Companies need to be able to quickly move from concept, to demo, to beta, to delivery of their service or product ideas. The faster they can eliminate the ones that don’t work they will reduce costs and get to new revenues sooner. So when you are looking to build IT in this new world and also want to try out new service delivery or product ideas quickly and cost effectively, the cloud is the obvious choice for executives.

How will your company prepare for the new IT challenges ahead?

Eric Ransden
Partner, PTP

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