August 5, 2021

Restarting Technology: The Future Flickers Into View

Faced with a bulky office computer, any technician worth their salt begins by telling the frustrated user to try turning the computer off, then back on again. But how will that strategy work when it’s the entire tech economy that’s turned off, then back on again, as the COVID-19 pandemic begins to wane?

The screen is flickering to life, and while the picture of the post-pandemic technology sector isn’t entirely clear yet, some images are beginning to take shape:

  • People who moved much of their work and daily life online don’t appear to be reducing their internet usage.
  • Many of the changes brought about by the pandemic – remote meetings, most notably – will remain in place, although hybrids that combine in-person and remote participation are becoming more common.
  • Network security is a growing concern, reflecting the vulnerabilities of networks that stretch into home offices as well as highly publicized ransomware hacks of corporate systems.

The clearest indicator of the future of the technology sector is the continued high demand for broadband services. 

“We’ve seen huge changes in the utilization of the network,” said David Diers, vice president of technology in the southwest region for broadband provider Cox Communications. “We’ve never had so much demand on our network.”

High-Speed Scaling

Diers, who oversees a region that includes Las Vegas and Arizona, said households’ demand for broadband capacity had been growing at a steady 25 percent annual clip over recent years — but the pandemic threw projections out the window. 

“We saw two years of growth within a three-month time period,” Diers added. 

And it wasn’t just the sheer volume of traffic that challenged Cox. Internet networks, like freeways and street systems, are built in varying sizes, depending on the expected traffic. With the arrival of the pandemic, Internet connections along quiet suburban streets suddenly were filled with business-related, work-at-home traffic. Adding to the demand was schoolwork for remote students and streaming entertainment for families who couldn’t go to movies. Cox scrambled to upgrade its system. 

“Basically, we pushed fiber deeper into our network,” Diers said. 

But that involved quickly getting permits from local governments, striking agreements for rights of way, upgrading electronic hardware and hanging thousands of notices on residential door handles, letting residents know their service would be interrupted for a couple of hours while new gear was installed. 

At the same time, Cox employees worked closely with business clients who had contracted for broadband service into their offices and suddenly found they didn’t need the connection. In many cases, Diers said, Cox and its clients simply agreed to extend the term of the contract to make up for weeks that offices were dark.

For remote workers, Cox introduced a work-at-home connection that provided enterprise-levels of service and response time. But the biggest challenge might have been getting Internet service to more than 12,000 school students in the region who didn’t have connections they needed for remote learning. Working with public- and private-sector partners in the “Connect to Compete” program, Cox got service to about 6,000 homes, many of them with multiple school-aged children, by the time school began last autumn.

Pushing Reset

Will all the additional hardware and all the higher-capacity fiber lines be needed as people return to work, students go back into classrooms and families go out for entertainment? So far, Diers said, Cox believes that household demand is returning to its 25 percent annual growth — and it’s beginning that growth rate from the substantially higher base established during the pandemic. Many folks who started buying groceries online during the pandemic are continuing the practice even as COVID-19 wanes, and they’re moving other household routines online as well. “People are more dependent on Cox service than ever before,” Diers said. 

The picture about demand for business broadband service is slightly less certain as employers decide about work-at-home and hybrid models. Cox executives are certain, however, that the broadband capacity installed in office parks and other business locations will be needed sooner than later, even if the capacity is filled less quickly than projected. 

That view is supported, Diers explained, by the surprisingly fast rebound on the Las Vegas economy. Hotels are filling, conventions are returning, and tourism is picking up. “That’s all great news,” he added. 

The rebound is reflected, too, at the giant data centers operated by Las Vegas-based Switch Inc. across the United States. In the first quarter of this year, the company said revenues were up about $2 million from the same quarter a year ago — that would have been the last quarter before the pandemic landed with a thud on the American economy.

Nearly 90 percent of those increased revenues, Switch said in a Securities and Exchange Commission filing, came as its existing customers rented more space for servers in Switch data centers. Switch serves more than 950 customers ranging from large technology and digital media provers to e-commerce outfits and financial institutions. A few weeks ago, Switch announced a major push into the central United States with construction of more than 1.5 million square feet of data center space next to Dell Technologies’ global headquarters in Round Rock, Texas. That followed the company’s decision to purchase Data Foundry, a data-center company that operates about 500,000 square feet of data centers in Austin and Houston. 

Switch is also positioning itself for strong growth in its home state with the economic rebound. Major contracts with an e-commerce provider and a semiconductor developer caused Switch to accelerate the construction of its second big data center at Tahoe-Reno Industrial Center east of Reno. It’s also accelerating plans for a third center at the location. The same e-commerce customer is growing its footprint at the Switch Core Campus at Las Vegas, too. (Switch also operates data-center complexes in Atlanta, GA and Grand Rapids, MI).

Fully Utilized

While demand for broadband and data centers remains strong, more uncertainty surrounds the way that businesses will use technology in the post-pandemic world. Dave Archer, president and chief executive of NCET, the 600-member business group in Reno previously known as “Nevada’s Center for Entrepreneurship and Technology,” said the uncertainty is understandable, given the sheer scope of the pandemic’s effects on society and the economy. 

“Everyone went home,” he said. “It literally happened overnight. In the history of the world, we’ve never seen anything like it. And nobody has any idea what to do now.” That, Archer said, is reflected in the sorts of training sessions that NCET members request.

At the beginning of the pandemic, they wanted sessions about the nuts-and-bolts of technology in a remote work environment. Everyone wanted to learn how to do effective Zoom calls. Security of corporate networks wired into employees’ homes was a worry. A few months later, the interests of NCET members had shifted into the soft skills of recruiting, managing and motivating a remote workforce. And now? They’re struggling for answers. 

Archer spoke recently with the owner of one business — a firm that occupies traditional office space — who is now looking for four other businesses to share the space. Each would bring its staff into the office one day a week and work remotely the other four days. 

And that, Archer noted, presents all sorts of technology questions to the professionals who would oversee five separate and secure networks within a single geographic footprint. 

Those sorts of questions are creating fresh opportunities for companies that provide managed IT services to business customers, said Nathan Whittacre, president and chief executive officer of Stimulus Technologies, a Las Vegas-based provider of managed IT support, cloud-computing solutions and Internet services. 

At the onset of the pandemic, customers needed dramatically more help from Stimulus Technologies — “They were counting on us to help them in operation,” said Whittacre. But, the boom didn’t last. By the autumn of 2020, business began to slow. Clients had made the transition to remote work and didn’t know what their technology needs might be once the pandemic lifted.

“They weren’t investing in any new infrastructure,” Whittacre said. Business rebounded sharply this spring as companies began returning to their offices and began shaping hybrid office-and-home workplace models that demand far more complex networks than those of the old days. It’s no longer enough to merely install a server in a closet and run some cables through the ceiling. 

“We have to rethink the way that we do IT services,” said Whittacre. “The technology is out there now to help businesses work in any way they want.” 

A substantial number of the clients of Stimulus Technologies, for instance, are moving to Microsoft’s Windows Virtual Desktop, which the software giant released just as the COVID-19 pandemic struck. Whittacre explains that the Microsoft product bolts together two well-seasoned Microsoft products — its Microsoft 365 suite of office tools and its Azure cloud services — to create a package that serves hybrid workplaces. 

Remote and hybrid workplaces also have forced a rethinking of pricing structures for providers of managed IT service such as Stimulus Technologies. Pricing that once was based on seats — the number of desks with computers in an office — now is likely to be based on the number of users instead.

Securing Networks

Business computer networks that extend from paneled corporate boardrooms to desks in the guest bedrooms of employees’ homes create all sorts of new opportunities for bad actors to wreak havoc. Even before the much publicized ransomware attacks on Colonial Pipeline and the meatpacker JBS this spring, Stimulus Technologies was strongly encouraging its clients to take network security more seriously.

“Small businesses are the low-hanging fruit,” Whittacre said. “They are the most susceptible to cyberattack.” 

Owners and managers of small businesses generally have at least passing familiarity with security issues and their potential costs, Whittacre said, but they’re often reluctant to make much more than minimal investments to upgrade security. 

Increased concerns about digital security have been felt, too, in enrollments at Nevada Technology Academy. The Reno-based academy, affiliated with Multnomah University of Portland, Ore., began training its first students in early 2018. 

Steve Andreano, its director of technology programs, says Nevada Technology Academy has strengthened its offerings in cyber-security, and demand is rising for graduates with those specialized skills. The academy also has seen reasonably strong demand for students trained to become the computer technicians who fix laptops and servers. But enrollments in most other areas — fields such as software engineering or the Internet-of-Things — have been weaker. 

“The pandemic caused a near elimination of demand for technology graduates,” Andreano said. “The onset of the COVID-19 pandemic caused most employers in the Reno area to institute hiring freezes and eventually layoffs. That all but eliminated the possibility that entry-level graduates would be able to find work in the technology businesses.” 

At the same time, he says potential students have faced their own financial issues — many of them lost jobs during the pandemic — and they’re skittish about investing money in training for a new career until the economy settles down. A surprising factor may be at play as well: Big-tech companies are taking a bashing in the media and on Capitol Hill, and students might not want to tie their future to an unpopular industry. 

“Our biggest challenge is communicating to the potential workforce the positive impacts technology can make as we move into a post-COVID world,” Andreano said. “It’s very challenging to get that message to the potential student population.” 

The transition into a post-COVID world also is upending some traditional workforce-recruitment strategies. Whittacre, for instance, said Stimulus Technologies has faced more difficulties in attracting entry-level staff than the recruitment of highly skilled workers. 

The sharp decline of the Las Vegas hospitality and gaming sectors in mid-2020 put many top-flight technical and administrative workers into the employment market, and Whittacre said Stimulus Technologies hired several strong performers. But lower level openings sometimes have stood vacant for months as the firm looks for candidates with good basic skills and customer service savvy.

Hardwired Changes

Some of the changes in the tech sector are only beginning to come into view. Archer said, for instance, that pandemic-related technology appears to have been a great leveler within corporations. Top executives who had been imposing during in-person meetings in their oak-lined corner offices became less imposing in Zoom meetings with their living rooms as a backdrop. 

“A CEO’s living room, it turns out, looks pretty much like anyone’s living room,” said Archer. 

And given the critical importance of moving to remote-work environments within a matter of days and ensuring that those networks remained secure, top executives often found themselves far more engaged in technology than in the past, Archer says. Still to be determined is whether that level of engagement persists.

Also remaining to be determined is the effect of the pandemic on funding of tech-related startups in northern Nevada, which appears to have slowed in the past year. Archer said investors want to visit face-to-face with entrepreneurs, look into their eyes, hear the confidence in their voices. Zoom meetings and phone calls simply haven’t delivered enough information about entrepreneurial founders to allow investors to feel comfortable about putting their money into startups. 

And those impacts probably will pale in comparison to the sweeping social changes just over the horizon as adoption of many technologies accelerated during the pandemic. The biggest impacts, Archer said, likely begin with work-from-home models. 

“Now that they been at home, some people aren’t all that interested in going back to work in an office,” he said. 

And that, in turn, affects everything from sales of sweatpants as workday apparel (steady) to the number of lanes needed on urban freeways that carry thousands of commuters from outlying suburbs to central-city offices (down). 

Andreano added no one in any sector of the economy should underestimate the effects of the accelerated, post-pandemic adoption of new technologies. “Every industry that has anything to do with human beings will begin deploying technology to enhance their presence,” he said.

Source link