Airbnb was one of the first Silicon Valley tech companies to send employees home in the wake of COVID-19. The tourism and hospitality giant, renowned for its generous flexible work perks, already had the technology, practices, and culture in place to continue business operations remotely, and was as well-positioned as any to weather a massive work-from-home event.
As all forms of nonessential travel came to a halt, however, the company’s outlook wasn’t so great. Airline travel dropped 96% in April compared to the same time last year, and according to AirDNA, bookings of Airbnb listings plummeted around the world (Beijing saw a 96% decrease). To save on overhead, Airbnb was forced to cut 1,900 of its 7,500 employees—a 25% downsizing and one of the largest layoffs reported during the COVID-19 era.
The unprecedented nature of COVID-19 caught most organizations off guard, and despite how ready organizations were to embrace remote work, many of them were still adversely affected. Remote work helped companies like Facebook, Microsoft, and Google endure the lockdowns and keep business operations moving, but others such as Airbnb weren’t so lucky.
Business priorities are changing
The unfortunate reality is that in times of crisis, nothing is certain. Organizations just as prepared as others might undergo more damage simply due to the nature of their business. Recovery plans should include the ability to scale operations to accommodate changing business needs and structural cost cuts.
For example, reducing staff was an unpredicted yet necessary change for companies like Airbnb, and many organizations are likely to follow suit. A recent Gartner survey on 161 finance executives found that 34% of organizations plan to furlough staff and 25% plan to reduce their workforce, among other actions such as hiring freezes and reduced salaries. Similarly, a recent PwC study on 867 CFOs found that 49% anticipate changes to their workforce as part of their post-COVID cost-containment strategy.
Whether organizations shrink or expand their workforce in the coming months, the bottom line is that technology must scale accordingly. Less staff means fewer users on a system, providing an opportunity to scale down capacity and cost. Once an organization recovers, IT teams might need to scale up their technologies to support an increase in staff.
It’s time we recognize the role scalability plays in helping organizations survive and thrive in periods of recovery. Here’s why cloud technology is so important.
The issue with on-premises infrastructure during disasters
As soon as people were mandated to stay at home amidst the pandemic, Netflix subscriptions for the first quarter surpassed original projections by double. After all, when you’re trapped at home with nowhere to go and nothing to do, Tiger King makes for superb entertainment.
The massive influx of new subscribers, however, meant Netflix needed to scale up quickly to meet the spike in demand. The company’s hybrid cloud model—with Amazon Web Services (AWS)—allowed it to effortlessly scale up cloud capacity and continue operations without any interruptions for end-users. As Dave Temkin, VP of Network and Systems Infrastructure at Netflix, said during a webinar, “We’re seeing that, generally, nothing is absolutely melting down. It is scaling quite well, both our system and other people’s systems.”
Netflix’s reliance on cloud infrastructure might have saved the company from a possible uptime disaster, but many organizations with on-premises infrastructure won’t have the capability to scale workload capacity in the same way. Traditional on-premises systems often rely on older software architectures that can be complex and inflexible. As a result, businesses aren’t able to quickly adapt and respond to evolving needs.
In periods of recovery, however, flexibility is key. For example, organizations experiencing rapid business regrowth in the post-COVID-19 era can quickly outgrow servers. On the other hand, organizations experiencing slower regrowth might end up with extra capacity while paying for licenses and tech support. This amounts to extra, unnecessary technology expenditures at a time when money is especially scarce.
Why cloud scalability matters
Scalability allows organizations to optimize costs wherever possible—and in periods of recovery, money matters. If an organization with on-premises architecture is suddenly operating at half capacity, that’s extra money down the drain in maintenance, security, real estate, and personnel costs. Companies need to optimize their IT productivity to ensure a rapid and efficient disaster recovery. This is where public cloud’s scalable architecture comes in.
Public cloud solutions allow organizations to customize services for their changing business needs and require no major commitments to service providers. For example, the amount of cloud-based communications tools (such as unified communications) are expected to skyrocket as 74% of companies plan to permanently shift to more remote work in the post-COVID-19 era. Cloud communications providers can easily meet the surging demand for remote work tools and work closely with organizations to cater to their unique requirements. As those organizations continue to grow, the cloud grows with them.
Business needs can evolve fast in periods of recovery. As the economy bounces back, sales will eventually return—possibly en masse. Businesses will have to scale up customer support staff and tools to handle the increased volume coming in. On-premises solutions can get easily overwhelmed, but public cloud services allow IT leaders to effortlessly scale and not worry about the infrastructure.
The adoption of more cloud technologies seems to already be on business radars. According to Flexera’s State of the Cloud Report 2020, 47% of businesses plan to adopt more cloud solutions post-COVID-19. Organizations realize that in order to meet the unpredictably-changing landscape of business recovery, scalable cloud solutions must be part of the strategy.
As Brian Solis, global innovation evangelist at Salesforce, puts it, “As we come out of this crisis, you’ll see investments in cloud and multicloud accelerate, but the trajectory of those investments will be tied to specific needs now and over the immediate horizon.”
Building a future-proof organization with scalable operations
As the COVID-19 pandemic forces organizations to explore agile technology solutions, leaders can take this opportunity to rethink their short and long-term IT strategies. Should your organization continue operating on on-premises technology? How much of your company’s workflow would be migrated to the public cloud? Does a hybrid cloud solution make sense?
By exploring scalable cloud solutions now, your organization can be fully prepared to withstand any obstacles in its business recovery path. Moreover, when your organization recovers and prepares to grow again, your cloud services will be ready to scale and support your every need.
Remote work is one of the most crucial factors in the post-COVID-19 era of work. Organizations returning to work are prioritizing employee safety by implementing flexible and remote work policies in the short term, meaning current and future employees might often work remotely. They’ll need the right tools to communicate and collaborate effectively and drive business success.
Unified communications as a service (UCaaS) solutions like the RingCentral app provide the scalability, robustness, and agility organizations need to support a growing remote workforce. The RingCentral app combines team messaging, video conferencing, and cloud phone into a single platform that allows every employee to collaborate with their teams from anywhere in the world and on any device. Unified communications solutions future-proof your organization as staffing needs change throughout the recovery process and ensure that your organization thrives in the future of work.
Originally published Jun 12, 2020, updated Jan 18, 2023