The technology trends driven by the coronavirus pandemic – such as the switch to remote work – will continue as soon as a vaccine is available, according to the former boss of IBM.
Ginni Rometty, who will serve as Executive Chairman of IBM after retiring from the position of CEO this year, predicted that digital technology will continue to transform the way businesses work, even if the world returns to some degree of normalcy with the advent of a vaccine.
Their comments followed an announcement from the drug company Pfizer that his coronavirus vaccine is more than 90% effective in preventing Covid-19 infections. Key stocks that benefit from people staying home due to the pandemic – like Zoom and Netflix – fall sharply follow the news.
She added that remote work “stays here” and will become part of a “hybrid” work model where some people work in offices while others stay at home.
A vaccine “allows us to go back to a slightly more recent normal,” said Rometty. “But a number of those things in the hybrid way of working I believe will remain and the digital acceleration will continue because people have now seen what is possible.”
Covid-19 not only sparked a wave of teleworking around the world, it also led to increased demand for digital health services and education. In many countries there were teachers and doctors as well as pupils, parents and patients forced to adapt to virtual paths Access to school hours and health appointments.
Several countries across Europe have reinstated nationwide bans in the past few weeks to help slow the recurrence of coronavirus cases. However, some investors are questioning how far pandemic-related technology trends will continue when a vaccine allows economies around the world to reopen more widely.
“Years” of innovation that preceded the coronavirus saw many companies digitize at the start of the pandemic, but Rometty said there are “different investment steps” in cloud computing – a data structure that companies can use to access information that is that not locally but stored in remote databases. Apart from IBM, cloud services are also sold by competitors Amazon, Microsoft, alphabet and Alibaba.
IBM announced in October that it will outsource part of its information technology services business This allows it to focus more on cloud computing, which is growing faster and has high margins. IBM stocks has picked up on the news but has since moved back about 10% from those highs.
Ginni Rometty in 2019.
Chesnot | Getty Images
“If you think about it, only 25% of the world is in a cloud trip – there are 75 left,” said Rometty. “The reason 75% haven’t moved yet? It’s the difficulty in either redesigning or modernizing those applications.”
IBM, she said, is “fully” focused on so-called “hybrid cloud” technology, which combines private and public cloud services and gives companies more flexibility in the services they need. The Company bought Red Hat, a major distributor of open source software to drive this hybrid strategy.
IBM has focused its older businesses on the cloud over the years to offset the slowdown in software sales and seasonal demand for its mainframe servers.
Rometty is now serving as Executive Chairman of IBM with Arvind Krishna take the reins as the company’s new CEO.