Industry Spotlight for August – Future of Work

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The Future of Work is here, now. Organisations were faced with unprecedented challenges of coping with the work-from-home model, when COVID-19 hit earlier this year. Many organisations managed the pivot very successfully, but all organisations were impacted in some way. Various trends have emerged over the last few months, that are likely to persist long after the immediate COVID-19 measures are removed by countries. In the Ecosystm Digital Priorities in the New Normal study, we find that organisations will continue to cater for remote employees (Figure 1) and keep a firm eye on employee experience (EX).

Organisations will continue to Enable Remote working 2020-21

August has seen these clear trends in the Future of Work

#1 Tech companies leading from the front in embracing the Future of Work

As the pandemic continued to spread across the globe, various companies adopted the work from home model at a scale never seen before. While it is still unclear how the work model will look like, many companies continue to extend their remote working policies for the remaining year, and some are even thinking of making it a permanent move.

Tech companies appear to be the most proactive in extending remote working. Google, Microsoft, and AWS have all extended their work from home model till the end of the year or till the middle of next year.  Earlier in the month Facebook extended its work from home program until mid-2021 and are also giving employees USD 1,000 to equip their home offices. This appears to be a long-term policy, with the company announcing in May that in the next 5-10 years, they expect 50% of their employees to be remote. Similarly, Salesforce and Uber also announced that they would be extending remote working till the mid-next year, and are providing funding for employees to set up the right work environment.

In Australia, Atlassian has made work from home a permanent option for their employees. They will continue to operate their physical offices but have given employees the option to choose where they want to work from.

Some organisations have gone beyond announcing these measures. Slack has talked about how they are evolving their corporate culture. For example, they have evolved their hiring policies and most new roles are open to remote candidates. Going forward, they are evaluating a more asynchronous work environment where employees can work the hours that make sense for them. In their communique, they are open about the fluid nature of the work environment and the challenges that employees and organisations might face as their shift their work models.

Organisations will have to evaluate multiple factors before coming up with the right model that suits their corporate culture and nature of work, but it appears that tech companies are showing the industry how it can be done.

#2 Tech companies evolve their capabilities to enable the Future of Work

Right from the start of the crisis, we have seen organisations make technology-led pivots. Technology providers are responding – and fast – to the changing environment and are evolving their capabilities to help their customers embrace the digital Future of Work.

Many of these responses have included strengthening their ecosystems and collaborating with other technology providers. Wipro and Intel announced a collaboration between Wipro’s LIVE Workspace digital workspace solution and the Intel vPro platform to enable remote IT support and solution. The solution provides enhanced protection and security against firmware-level attacks. Slack and Atlassian strengthened their alliance with app integrations and an account ‘passport’ in a joint go-to-market move, to reduce the time spent logging into separate services and products. This will enable both vendors to focus on their strengths in remote working tools and provide seamless services to their customers.

Tech companies have also announced product enhancements and new capabilities. CBTS has evolved their cloud-based unified communications, collaboration and networking solutions, with an AI-powered Secure Remote Collaboration solution, powered by Cisco Webex. With seamless integration of Cisco Webex software, Cisco Security software, and endpoints that combine high-definition cameras, microphones, and speakers, with automatic noise reduction, the solution now offers features such real-time transcription, closed captioning, and recording for post-meeting transcripts. 

Communication and Collaboration tools have been in the limelight since the start of the crisis with providers such as Zoom, Microsoft Teams and Slack introducing new features throughout. In August Microsoft enhanced the capabilities of Teams and introduced a range of new features to the Teams Business Communications System. It now offers the option to host calls of up to 20,000 participants with a limit to 1,000 for interactive meetings, after which the call automatically shifts to a “view only” mode.  With the possibility of remote working becoming a reality even after the crisis is over, Microsoft is looking to make Teams relevant for a range of meeting needs – from one-on-one meetings up to large events and conferences. In the near future, the solution will also allow organisations to add corporate branding, starting with branded meeting lobbies, followed by branded meeting experiences.

While many of these solutions are aimed at large enterprises, tech providers are also aware that they are now receiving a lot of business from small and medium enterprises (SMEs), struggling to make changes to their technology environment with limited resources. Juniper has expanded their WiFi 6 access points to include 4 new access points aimed at outdoor environments, SMEs, retail sites, K-12 schools, medical clinics and even the individual remote worker. While WiFi 6 is designed for high-density public or private environments, it is also designed for IoT deployments and in workplaces that use videoconferencing and other applications that require high bandwidth.

#3 The Future of Work is driving up hardware sales

Ecosystm research shows that at the start of the crisis, 76% of organisations increased investments in hardware – including PCs, devices, headsets, and conferencing units – and 67% of organisations expect their hardware spending to go up in 2020-21. Remote working remains a reality across enterprises. Despite the huge increase in demand, it became difficult for hardware providers to fulfil orders initially, with a disrupted supply chain, store closures and a rapid shift to eCommerce channels. This quarter has seen a steady rise in hardware sales, as providers overcome some of their initial challenges.

Apart from enterprise sales, there has been a surge in the consumer demand for PCs and devices. While remote working is a key contributor, online education and entertainment are mostly prompting homebound people to invest more in hardware. Even accessories such as joysticks are in short supply – a trend that seems to have been accelerated by the Microsoft Flight Simulator launch earlier this month.

The demand for both iPad and Mac saw double-digit growth in this quarter. Around half of the customers purchasing these devices were new to the product. Apple sees the rise in demand from remote workers and students. Lenovo reported a 31% increase in Q1 net profits with demand surges in China, Europe, the Middle East and Africa.

 #4 The impact on Real Estate is beginning to show

The demand for prime real estate has been hit by remote working and organisations not renewing leases or downsizing – both because most employees are working remotely and because of operational cost optimisation during the crisis. This is going to have a longer-term impact on the market, as organisations re-evaluate their need for physical office space. Some organisations will reduce office space, and many will re-design their offices to cater to virtual interactions (Figure 1). While now, Ecosystm research shows that only 16% of enterprises are expecting a reduction of commercial space, this might well change over the months to come. Organisations might even feel the need to have multiple offices in suburbs to make it convenient for their hybrid workers to commute to work on the days they have to. Amazon is offering employees additional choices for smaller offices outside the city of Seattle.

But the Future of Work and the rise of a distributed workforce is beginning to show an initial impact on the real estate industry. Last week saw Pinterest cancel a large office lease at a building to be constructed near its headquarters in San Francisco. The company felt that it might not be the right time to go ahead with the deal, as they are re-evaluating where employees would like to work from in the future. Even the termination fees of USD 89.5 million did not discourage them. They will continue to maintain their existing work premises but do not see feel that it is the right time to make additional real estate investments, as they re-evaluate where employees would like to work from in the future.  

There is a need for organisations to prepare themselves for the Future of Work – now! Ecosystm has launched a new 360o Future of Work practice, leveraging real-time market data from our platform combined with insights from our industry practitioners and experienced analysts, to guide organisations as they shift and define their new workplace strategies.   


Ecosystm Principal Advisors; Tim Sheedy (Technology), Ravi Bhogaraju (People & Organisations), and Mike Zamora (Infrastructure & Offices) provided holistic view of what the Future of Work will look like.
Ecosystm Engage Future of Work

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AWS and Slack Partnership Announced

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5/5 (1) As organisations aim to maintain operations during the ongoing crisis, there has been an exponential increase in employees working from home and relying on the Workplace of the Future technologies. 41% of organisations in an ongoing Ecosystm study on the Digital Priorities in the New Normal cited making remote working possible as a key organisational measure introduced to combat current workplace challenges.

Ecosystm Principal Advisor, Audrey William says, “During the COVID-19 pandemic, people have become reliant on voice, video and collaboration tools and even when things go back to normal in the coming months, the blended way of work will be the norm. There has been a surge of video and collaboration technologies. The need to have good communication and collaboration tools whether at home or in the office has become a basic expectation especially when working from home. It has become non-negotiable.”

William also notes, “We are living in an ‘Experience Economy’ – if the user experience around voice, video and collaboration is poor, customers will find a platform that gives them the experience they like. To get that equation right is not easy and there is a lot of R&D, partnerships and user experience design involved.”

AWS and Slack Partnership

Amid a rapid increase in remote working requirements, AWS and Slack announced a multi-year partnership to collaborate on solutions to enable the Workplace of the Future. This will give Slack users the ability to manage their AWS resources within Slack, as well as replace Slack’s voice and video call features with AWS’s Amazon Chime. And AWS will be using Slack for their internal communication and collaboration.

Slack already uses AWS cloud infrastructure to support enterprise customers and have committed to spend USD 50 million a year over five years with AWS. However, the extended partnership is promising a new breed of solutions for the future workforce.

Slack and AWS are also planning to tightly integrate key features such as: AWS Key Management Service with Slack Enterprise Key Management (EKM) for better security and encryption; AWS Chatbot to push AWS Virtual machines notifications to Slack users; and AWS AppFlow to secure data flow between Slack, AWS S3 Storage and AWS Redshift data warehouse.

William says, “It’s a win-win for both vendors. AWS has sealed a good partnership for its Chime solution and other AWS cloud services. This ensures that Amazon Chime is used alongside a vendor with a reputation in the collaboration space. On the other hand, Slack gets the benefits of a robust cloud architecture including reliability and security and can now embed its collaboration offering with voice and video capabilities for its customers.”

The Competitive Landscape

The partnership between AWS and Slack has enabled Slack to scale and compete with more tools in its arsenal. The enterprise communication and collaboration market is heating up with announcements such as Zoom ramping up its infrastructure on Oracle Cloud. The other major cloud platform players already have their own collaboration offerings, with Microsoft Teams and Google Meet. The AWS-Slack announcement is another example of industry players looking to improve their offerings through partnership agreements. Slack is already integrated with a number of Microsoft services such as OneDrive, Outlook and SharePoint and there was talk of being integrated with Microsoft Teams  earlier this year. Similarly, Slack has also integrated some GSuite tools on its platform.

“There is a battle going on now in the voice, video and collaboration space and there are many players that offer rich enterprise grade capabilities in this space. AWS is already Slack’s “preferred” cloud infrastructure provider, and the two companies have a common rival in Microsoft, competing with its Azure and Teams products, respectively,” says William.

The Single Platform Approach

The competition in the video, voice and collaboration market in becoming increasingly intense and the ability to make it easy for users across all functions on one common platform is the ideal situation. This explains why we have seen vendors in recent months adding greater capabilities to their offerings. For instance, Zoom added Zoom phone functionality to expand its offerings to users. Avaya released Spaces – an integrated cloud meeting and team collaboration solution with chat, voice, video, online meetings, and content sharing capabilities. The market also has Cisco as an established presence, providing video and voice solutions to many large organisations.

Organisations want an all-in-one platform for voice, video and collaboration if possible as it makes it easier for management. Microsoft Teams is a single platform for enterprise communications and collaboration. William says, “Teams has seen steady uptake since its launch and for many IT managers the ability to capture all feedback, issues/logs on one platform is important. Other vendors are pushing the one vendor platform option heavily; for example, 8×8 has been able to secure wins in the market because of the one vendor platform push.”

“As the competition heats up, we can expect more acquisitions and partnerships in the communications and collaboration space, in an effort to provide all functions on a single platform,” says William. “However, irrespective of what IT Teams want, we are still seeing organisations use different platforms from multiple vendors. This is a clear indication that in the end there is only one benefit that organisations seek – quality of experience.”

 

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