The impact of the extended pandemic on the "cloud” economy

This novel coronavirus pandemic has lasted much longer than anticipated, and everyone is now expected to be psychologically prepared for the long haul. All over the world, emerging technologies best represented by artificial intelligence, big data, and 5G have continued to play a very important role in pandemic monitoring, viral traceability, prevention, control, and treatment, as well as resource allocation.

Demand for digital and smart services and scenarios is exploding. In addition to the lively performance of e-commerce during the pandemic, "cloud" models such as online education, remote offices, and webcasting have become new bright spots in the digital economy.

According to forecasts from the IDC, by 2024, 51% of global IT budgets will be allocated for digital innovation/digital transformation, of which China's share will exceed 70%. This will have a massive impact on just about every company. "Digitization first" will become the catchcry of enterprise transformation in the digital economy.

Focal points of digital transformation

As the coronavirus has continued to spread during the pandemic, the digital transformation of enterprises has been swift and extensive. It has been focused in the following areas.

1. Widespread use of video conferencing platforms

During the pandemic, the stay-at-home order motivated non-essential employees to work remotely from home, which completely disrupted the process of traditional office meetings. Video conferencing has become an important way to communicate and meet with colleagues and customers. People can share a screen to guide the remote side through a certain process, or they can ask questions in chat while others are presenting. The widespread adoption of this technology has changed the way people work, and has consequently promoted the rise of remote work.

Given that on-site meetings cannot be held due to the need for social distancing, virtual meeting platforms have also received wider attention. Many companies have launched virtual meeting platforms to facilitate the continuation of their meetings and activities throughout the pandemic. Through live broadcasting and pre-recorded videos of speeches, people can participate in these events online.

The rise of online conferencing has also saved companies large amounts of money that would be otherwise devoted to event planning, catering, accommodation, airfares and all the other expenses of holding physical conferences in the past. This has also promoted the development and popularization of online conferencing. According to the forecast from Grand View Research, the global virtual event market will expand by 23.2% over the next six years.

Of course, video conferencing has its limitations. Firstly, security and stability need improvement. Since video software is based on the Windows operating platform and PC architecture, there are vulnerabilities to attacks which make it unsuitable for long-term operation. This is especially true when a software-based conference room terminal uses a large number of external cards and peripheral support equipment, which create more points of potential failure and moreover multiplies the potential challenges for troubleshooting.

Secondly, video and audio effects tend to be uneven. The lenses on the USB cameras used by desktop software terminals generally only provide video quality lower than Common Intermediate Format (CIF), and dedicated meeting camera lenses configured for meeting room software terminals also have issues with large delays and audio-video synchronization.

The network is the basis of video conferencing. Current software solutions for video are usually based on general-use PC architecture and generally only support Ethernet transmissions. They cannot or seldom support dedicated-line H.320 network architecture. The need to adapt to more network environments is another area of video conferencing that requires improvement.

2. "Blackboard + Chalk” Online Education Challenge

The pandemic has presented massive changes in education – both in the way students learn and the way teachers teach. Some students have studied on virtual platforms, and many traditional classroom learning models have been replaced by virtual platform learning and hybrid learning models that combine virtual and physical modes.

Digital transformation has led to several changes in practical changes. Schools have implemented the learning management system (LMS) to assign and submit assignments and exams, along with video conferencing platforms for teachers and students to ensure that students can access the Internet and securely connect to the school’s computer or tablet computer.

While many schools have now resumed normal teaching, thanks to the positive results achieved by digital transformation during the pandemic, they are planning to incorporate more virtual learning elements into their curriculum plans in the future, especially for students who have issues learning in a traditional classroom environment. This will also enable these students to access more educational resources.

Of course online education has certain drawbacks. After all, education has traditionally relied on the learning environment created by the supervision of the teacher and participation of the classmates, with effective and timely feedback. Online education, without the physical interaction and supervision by the teacher, under-serves the needs of students with little self-discipline.

Teaching scenarios in online and offline education are clearly different. The online model shrinks the teacher's field of vision, so the sense of participation in online education is much weaker than in a physical classroom.

3. Virtual service upgrades in the food service industry

Food service is one of the industries most adversely affected by the pandemic. Digital transformation has become an important way for many restaurants to maintain their sources of revenue. In order to comply with the standards of the health agency and keep their businesses operating, restaurants began to digitize their function menus. This requires customers to scan a QR code to view the function menu on their mobile devices. Some restaurants have also begun using food delivery apps to expand orders and delivery options, and have expanded further by launching their own customer-facing ordering apps. After the pandemic passes, many of these digital transformation measures will undoubtedly be retained and continue to deliver benefits to both restaurant staff and customers.

4. Stay-at-home orders have generated a "stay-at-home economy"

Major platforms are using AI technology to engage in new, "contactless" retail. Through smart allocation of goods, smart marketing recommendations, smart payment, smart customer service and smart distribution, they have achieved a "contactless" configuration for the entire industry chain. According to iResearch Consulting Group, China's unmanned retail market is expected to exceed RMB 65 billion in 2020.

Of course, the popularity of the online economy has also taken a slice of the traditional offline retail pie. During the pandemic, some physical stores suffered heavy losses in customer flow and revenue, compounded by the expenses of storefront rent and personnel. Many stores – and even many well-known companies – succumbed to these mounting and ultimately insurmountable pressures, becoming casualties of the pandemic.

The importance of digitization and technological investment

The importance of digitization and modern technology in life and work has already been widely acknowledged. In the post-pandemic era, the prospect of investment in technology has become increasingly attractive, and a growing number of investors are optimistic about the future returns from tech investment.

Darren Williamson, National Head of Real Estate at Freeths LLP, said, “Corona pandemic has opened our eyes to the great and agile potential offered by various digital platforms, and those who invest in these platforms and enable people to use them will achieve great successes in the future.” He continued, “The survey shows real estate professionals are more aware than ever that technology has forever changed the way they work.” 

Mark Mathews, vice president of research development and industry analysis at the National Retail Federation (NRF), said, “The pandemic has greatly accelerated the application of new technologies to a large number of retailers in a very short period, knowing that the adoption of these technologies and their adoption at work would have taken many years without the pandemic. But instead, it was approved in just weeks.”

Clearly, life as we knew it and the nature of work has irreversibly changed. “The clock will not turn back,” as Ruth Porat emphasized in her session mentioned in the first Qatar Economic Forum.

Conclusion

In the post-pandemic era, as next-gen technologies such as cloud computing, big data, artificial intelligence and 5G continue to advance, the digitalization of industry will bring more opportunities for profit, and more industry innovators will join the competition. Retail innovations and creatively integrated businesses will continue to emerge as the digital economy presents boundless new possibilities.