The future of cloud-based software and services post-pandemic

19/04/2021
Read Time: 4 Min
Graphic of people talking over video conferencing

Covid-19 has forced many companies to rapidly adopt cloud-based software and services to digitize their operations in a way and at a rate that could not have previously been foreseen. Whether cloud-based solutions enable how we communicate or how we collaborate, businesses have needed to find a way to work productively and efficiently in the new world. This has hugely accelerated the growth of cloud-hosted solutions and created a step-change in adoption. 

If people move back to the office, what will happen to all the tools now in place and the ecosystem that implements and supports the cloud? My prediction is that, if anything, the next 12 months will see an even greater level of cloud adoption as businesses increasingly become digital. Having gone through the rapid shift to cloud-based systems businesses are unlikely to take a backwards step from the operational efficiency and financial flexibility they now have in place and instead are likely to double down on their investment.

However, increasingly businesses will want to see a identifiable return on their investment and will expect to see more from their cloud-based solutions and cloud computing providers. In particular, they will look to start to optimize all of the cloud’s benefits, such as enhanced data and analytics, and the ability to deploy AI. 

The hybrid working model and questions for the cloud 

Some businesses may look back on a successful year and consider giving up their office presence altogether, however given the importance of training, collaboration and culture, it’s likely that the majority of businesses will keep a form of physical presence and operate a hybrid model going forwards.

This bodes well for cloud adoption, as the hybrid model still needs employees to be able to access the information and tools to do their job securely wherever they are. Choosing to adopt a hybrid working model is not without its challenges though, and I have no doubt leadership teams across the country are all thinking through similar questions, such as:

  • How will meetings work? It’s a fairly straightforward question when everyone is in the office or everyone is working from home, but how will this work when half of a team is in the office and the other half at home?
  • For many, hybrid working may also mean flexible working. How will team activity be tracked and collaboration maintained when people are not all online at the same time? 
  • Training and mentoring remotely has come on leaps and bounds in the last 12 months, however companies are not currently hiring at the same pace as they were pre-pandemic. When the recruitment market recovers, do businesses have the infrastructure in place to onboard and upskill new hires at scale? Are newer, especially more junior, employees making meaningful connections across the company? Do they benefit from the same passive learning that one can experience at the office?
  • Microsoft analysis of emails and meetings showed that while there has been a significant uptick in the time spent in virtual meetings over the last year. A lot of his time has been spent with our internal network. In contrast, wider networks have shrunk. How will people ensure that their wider networks grow and collaboration is enhanced, in a hybrid working environment? 
Graph

Source: Microsoft 

 
The good news is that the solutions to these questions will likely be found in the cloud. Tech will be key to solving for these issues, and I would expect over the next 12 months significant evolution in the collaboration and communication tools we’re all using. Many users are just scratching the surface of Microsoft Teams’s capability for example. Furthermore, just this month, Microsoft announced that it had acquired Nuance Communications for $16 billion, giving Microsoft a company that specializes in voice transcription and related AI software. This transcription technology could in time get integrated into Microsoft’s core products such as Teams. It isn’t just Microsoft, most of the hyperscaler cloud platform providers are evolving their products, whether organically or through M&A, to retain their market position, capture growth and customer relationships.

The biggest challenge for cloud-based providers 

The reason that cloud-based software and services providers need to evolve, is because the biggest challenge facing them will be customer retention. If we take online meeting services as an example, historically businesses would have had to invest in a service, such as WebEx, which is often costly and comes with a lot of equipment. Today, however, businesses are using cloud comms providers and can just turn services on and off with little upfront investment. This means that customers aren’t locked into providers in a way they once were. As a result, providers will need to over-deliver for their clients, retaining a high level of customer service as well as optimally iterating the features of their products, so that they remain ahead of the competition. Only by continuing to invest in product and service will they benefit from the market’s rapid growth. 

If you would like to talk about the opportunities that lie ahead for your cloud services business, please get in touch with daniel.bailey@ecipartners.com.

About the author

Daniel Bailey

"I work in the Investment Team at ECI. So, that means I try to find, meet and invest in exciting growth businesses and then do my best to support the teams at those business to scale into global market leaders."

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