Turn Volatility Into Opportunity
The story of explorer Ernest Shackleton and his men, who were stranded near Antarctica in 1915, is a dramatic lesson in human resilience. It’s also a remarkable story of agility. When their ship, Endurance, became trapped in pack ice, Ernest shifted into crisis management mode, converting the ship into winter quarters for his men. Months later, when the ship was about to be crushed, he said simply, “Ship and stores are gone, so now we will go home.” His ability to quickly pivot to a new goal — getting all his men home alive — was a key to their survival.
In the era of COVID-19, tech companies of all sizes are facing existential threats they couldn’t have imagined a few months ago. Some of them may be crushed, like Ernest’s ship, while others will survive and even thrive, becoming models of business resilience and agility for the next generation of entrepreneurs and business students.
The open-ended nature of the pandemic has created an environment of extreme and endless uncertainty. Tech companies, like their peers in other industries, are revising their sales forecasts and adapting to a world of volatile demand. But the current economic and social disruption is also creating opportunities for tech companies as consumers and businesses change their behaviors. The winners will be those that pivot quickly to take advantage of a shifting competitive landscape and find new solutions for new problems.
Buy, build, tweak, or partner your way into new markets
Recent events have made business resilience a top priority. As a result of the crisis, organizations in all industries are speeding up their digital transformation plans. Likewise, consumers — including those who are less technologically savvy — have become more digitally competent in recent weeks. Thus, the barriers to digital adoption have been lowered, presenting a unique opportunity for companies that can provide the products, services, and support that businesses and consumers need in these unique circumstances.
Some tech companies with strong balance sheets are pursuing an merging and acquisition (M&A) strategy to broaden their portfolio of offerings and add new customers. At the end of March, cybersecurity giant Palo Alto Networks (PAN) announced they are acquiring CloudGenix, making PAN a competitor in the software-defined wide-area network sector. We’ll likely see more mergers like this in the coming months, changing partnerships into competitive relationships and driving consolidation within specific sectors — especially those that can help support a distributed workforce and provide cloud infrastructure services. In the data center sector, 28 acquisitions closed in the first four months of 2020, topping the total for all of 2019.
Companies with the right capabilities are rapidly developing new products, or adapting existing products, to meet emerging needs of consumers and businesses. In early April, three weeks after social distancing measures were put in place in the United States, Facebook released a desktop version of its Messenger app, including unlimited and free group video calls. Their announcement expressed the hope that the app “will make it a little bit easier for people to stay in touch with friends and loved ones during this time.”
Other tech companies are forming strategic partnerships to quickly develop solutions needed to support a distributed workforce. The partnership between AT&T and Microsoft to create edge compute zones is just one example of this. By bringing computing and data storage services closer to end users, the two companies are helping their joint customers access the full speed and power of the new 5G mobile infrastructure.
A new partnership among HP Enterprise, Intel, and the Linux Foundation is also speeding advancements in 5G technology. On March 31, the three companies announced an open-source software project to help automate the deployment of 5G. The 5G rollout would have happened with or without a global pandemic, but the sudden increase in distributed workforces has made it both essential and urgent.
Pivot now to set yourself up for long-term success
The three examples below illustrate the kind of agility needed to thrive in today’s turbulent environment:
- On March 11 — the same day the World Health Organization declared COVID-19 a pandemic and the Trump administration issued a travel ban for Europe — Accenture launched a new website offering best practices to keep workers productive in the “elastic digital workplace.”
- Citrix, which specializes in technologies that support and enable a distributed workforce, was also quick to assert its leadership on the topic, sharing research, tools, and practical tips on its remote work resources hub.
- On March 31, the day Adobe launched its first virtual, on-demand Adobe Summit experience, the company also announced the Adobe Digital Economy Index (DEI), powered by Adobe Analytics. The DEI provides real-time data on customer behavior and the state of the global online economy, helping businesses and policymakers quickly gain insights to inform short-term actions and longer-term strategies.
In these examples, each company moved quickly, but they weren’t building something from scratch. Rather, they each created a timely, relevant offering closely aligned with their brand and business model.
Depending on your business, you may only need to slightly adjust your strategy to take advantage of emerging opportunities — or you may need to rethink your whole business model. In either case, don’t wait too long to make the call and initiate the change.
As time moves on, the capabilities developed during this time will not only help solve today’s problems, but also those in the future. Tech companies that can pivot quickly to meet new needs and circumstances, like Ernest Shackleton and his Imperial Trans-Antarctic Expedition, will weather the COVID-19 storm and set a course for long-term success.