Virtual private networks, firewalls and spending a bit more for dedicated hardware can be cheaper than supporting some virus-addled PC that hasn’t been updated since the Bush administration. And to make matters worse, fewer homes have any PC. Many people have stopped buying home PCs because their phones and tablets are more than adequate for basic tasks.
Winner: Zero Trust
When computer security teams started looking at the new decentralized environment, they saw danger everywhere. This level of supreme paranoia has crystalized into the buzzword “zero trust,” which means security teams have given up establishing a perimeter or creating any area where they might relax.
The zero-trust world means rethinking many internal applications so that they work appropriately when run from a coffee shop or someone’s kitchen. Any packets that head out into the network will be encrypted and authenticated.
Loser: Search engines
While people look for information on the internet for many reasons, some of the most valuable words for the search engines involve travel and active socializing. People in new spaces need more help. People at home tend to be more settled. If they search, it’s not for new places and restaurants, two categories that pay a premium for ad clicks. In June, Google’s revenues dropped reflecting this change. The company’s revenue jumped back, bolstered by its cloud products.
Winner: Gamified socializing
People still need to exercise and they love to compete. Companies such as Peleton and Echelon boomed by bringing the intensity of gym classes to people who are stuck at home. Others such as Tonal, Weela or Mirror are developing app and hardware that deliver coaching for weight training and stretching. Now that people have discovered the convenience, these distributed athletic experiences are going to keep attracting users who don’t have time to hit the gym.
Loser: Software for in-person events
Will people return to exercising together when the pandemic is over? The software for tracking membership, monthly bills and gym visits depends on it. Will people return to large athletic events like city-wide running races? Another collection of software companies track runners, flag cheaters and report their times. Others create tools for organizing conferences, fairs, and other large gatherings. All of these software tools depend on people returning to meeting together, something that must now compete with all of the digital alternatives.
Moreover, specialized software offerings that support in-person gatherings are suffering. Companies that build software for theatrical lighting or sound systems, for instance, aren’t going to be selling many new packages until theaters work themselves out of debt. The ad kiosks meant to capture the eye of someone walking through a lobby aren’t going to be seen by many for some time. There’s an entire ecosystem of RFID chip tools built for theme parks and other entertainment environments, and they only work when the chip is physically near. All of these areas and many similar niches are going to need to wait for the world to get more comfortable with gathering in person, and for the businesses that buy them to have the necessary budget to invest.
Winner: Cocooning software
Some platforms such as Disney Plus or Hulu are perfect to entertain everyone who is stuck at home each evening. Others such as newspapers and books are perfect for readers. Generally, subscription services that offer unlimited access to any of these have done well in lockdown. If you’re in a niche where reaching your customers at home with new apps or services is a business-worthy endeavor, it’s high time to explore.
Moreover, niche players in these areas will also thrive. Do you handle MPEG-4 conversion for the cloud? With Hollywood production shut down and people burning through more video than ever, subscription services are hungry for any content that might be interesting. Old movies, old shows and maybe even old commercials all need to be converted. So it’s not just Netflix and Disney who are winning here, but also the dozens of support companies in their corner of the software ecosystem.
The old vision of a sphere of personal privacy is quickly disappearing. Washington State wanted restaurants that reopen to keep track of customers’ names and addresses. The major phone companies are experimenting with developing tools that track who meets whom during the day in case one person gets sick. Privacy has always been a flexible ideal in constant negotiation between a world dominated by central control and a forgetful space that gave bad actors plenty of freedom to hide their tracks. Now that the stakes are higher during a pandemic, the balance is rapidly shifting away from the individual.
The way the cloud expanded to absorb the demand from video conferencing and collaboration software is a true testament to the vision that built this elastic pool of computational resources. While some cloud companies have warned that some instances may not be immediately available, and some spot prices have been a bit higher, for the most part spot prices have stayed much lower than on-demand costs. The cloud has largely delivered when society needed it most, and enterprises are accelerating and ramping up their adoption in the wake of the crisis.
Some reasons to keep machines on premises still make sense. The bill for steady computing is often much lower, and there’s something ensuring about the idea of being able to walk down the hall to the server room. But when your employees are off campus, there’s less of a distinction between the cloud’s data center across the country and your company’s server room back at the office. The best you can do is “ping” both machines.
There are deeper wrinkles. Many companies stick lightweight server rooms in the windowless storage space. Landlords don’t rent buildings that are 100 percent corner-office space. They usually mix in some worthless space even interns refuse to occupy. If you add in incentives like budget-priced electricity that some towns offer, stashing old machines in the corner of your building can be very cheap. In the winter, they even help heat the building. Of course, all of these advantages disappear if companies give up their leases on big buildings and instead downsize, asking large portions of their workforces to work from home.
Did your team have a conference room with walls covered with Gantt charts for a waterfall model for development so you can hit a delivery date in 24 months? Have you blocked out said war room for weekly or even daily progress meetings? Surprise. That was yesterday’s plan. Today, we’re shifting to working at home. You may still need to build huge charts and aim for delivery dates for two or three years in the future, but you’ll need to think quickly and adjust in minutes. Elaborate models set in concrete won’t work these days.
Loser: Modeling and past data
Two of the biggest buzzwords in the tech hype machine have been “artificial intelligence” and “machine learning” — automated tools for turning data about the past into models to predict the future. Thanks to the pandemic, the lockdown, the drastic shifts in habits and activities, not to mention the ensuing economic fallout, everyone putting these technologies to work is faced with a data modeling challenge, as so much has changed. All of the big data lakes and warehouses are filled with numbers based on how the world worked before the pandemic hit, but this data can’t help us figure out what’s coming next. We can’t use the data from third quarter 2019 or 2018 to predict the third quarter of 2020 because so many things are different. And everyone hopes that 2021 will be nothing like 2020. No one knows what the future will bring, but the odds are that it won’t be much like what we’ve seen.