Gregory S. Smith - The New Normal in IT

Technology companies did exceedingly well during the pandemic as organizations across the globe had to rapidly adapt to leveraging a variety of technologies (remote access, collaboration, online meetings, intranets, etc.) during the pandemic to keep knowledge workers staff productive while working remotely. Google's parent company, Alphabet, saw revenue jump 34 percent to $55.3 billion in the first quarter of 2021. 52 Google also reported the following:

The company made close to $18 billion in profit.

The company announced a $50 billion stock buyback. Companies only do this when they think their shares are undervalued.

Google's cloud revenue increased 46 percent year over year to $4 billion. 53

Companies that offer enterprise-class hosting Infrastructure as a Service (IaaS), such as Amazon, Microsoft, and Google, all benefited during the pandemic as organizations flocked to cloud services over on-premise solutions. Microsoft's revenue jumped 19 percent in the company's third quarter as “digital adoption accelerates.” 54 Microsoft reported the following details surrounding the growth:

Growth was primarily led by commercial cloud products, generating $17.7 billion of the total revenue.

Revenue from Azure rose 50 percent

Microsoft's Intelligent Cloud segment (Azure, Windows Server, SQL Server, Visual Studio, GitHub, Enterprise Services) reported $15.12 billion of the total revenue, up 23 percent.

The active users of Microsoft Teams, the collaboration and online meeting tool, grew from 115 million in the prior quarter to 145 million in the most recent quarter. 55

Transportation companies like FedEx and UPS did quite well during the pandemic as consumers shifted to home delivery purchase options versus shopping in brick and mortar stores. Amazon.comwas of course a large driver of shipped content via a variety of carriers. At the end of 2020, FedEx reported that it “more than doubled its profit in the latest quarter. 56 FedEx reported that it earned $1.23 billion in the second quarter, up from $560 million a year ago in the same quarter. 57 The transportation carrier also expects earnings to increase well into 2021 as demand continues for shipped products. 58 The company reported that ground delivery services gained 38 percent in revenue, while air-express services saw a gain of 14 percent. 59

United Parcel Service (UPS) reported in April 2021 that “daily volume jumped more than 14 percent in the first three months” of 2021 compared to the same period a year ago. 60 The company reported net income of $4.79 billion, up almost 400 percent from the same period last year with total revenue reported at $22.91 billion, a 27 percent increase. 61

The telecommunications market benefited greatly from the increase in demand for cloud and more robust bandwidth from employees who were working from home. The medical field (general practitioners, specialists, and even surgeons) was impacted during the height of the pandemic as elective surgeries were postponed and hospital staff converged to support the large influx of Covid-19 patients. Hospitals across the globe lost billions in revenue. Some are now attempting to recoup their losses by charging patients for Covid-19 hospital services via lawsuits.

I spoke with a number of physicians across a wide path of specialties (general practitioners in family practice, specialists like endocrinologist, pain management, orthopedic, dermatologists) as well as physical therapists. All described impacts to their practices, including revenue decreases and how they had to scramble to provide telehealth services to patients. Telehealth options within medical practices around the globe increased rapidly in 2020, starting shortly after the height of the pandemic. Data centers and telecommunications vendors reaped hyper growth rewards to support these services.

One such specialist provided some valuable input into the impact to their practice and how technologies like telehealth have helped lesson the revenue blow during the pandemic and likely set them up for future success postpandemic.

Medical Profession Survey Question: What impact did Covid-19 have on the medical profession during the peak of the pandemic in 2020?

Covid-19 has had a substantial effect on the medical community in both outpatient clinic and inpatient hospital settings. In the outpatient clinical setting, it caused an immediate pivot from in-person clinic visits to virtual telemedicine visits. This created substantial anxiety and confusion around how to code and bill these visits, whether insurance would accept these claims, and how to manage these visits from a technological perspective. In the initial days, there was substantial confusion from physicians and patients about which communication software to use and how to implement it safely .

While patients became comfortable with many of the early adopted teleconferencing platforms, the software did not yet support the encryption required to be HIPPA compliant. This was eased by the U.S. government's relaxation of regulatory restrictions on telemedicine communications .

Our clinic saw a substantial initial reduction in patient encounters and corresponding overall revenue decline that began in March 2020 and continued until August of the same year. Clinic visits are now 50 percent virtual, and I predict that they will continue to remain at least 50 percent into the foreseeable future. This will only be tenable from a business perspective if insurance companies continue to reimburse for telemedicine visits at rates comparable to office visits .

—DR. JOSE SOROS,MD, Pain Management Specialist, Point Performance

I asked my CxO panel some questions about revenue, remote work, use of consultants, staff productivity, and sourcing strategy before, during, and post pandemic. Following are their answers with additional input noted on certain questions:

CxO Survey Question: What revenue impacts occurred in your organization during the height of the pandemic in 2020? List U.S. and global operations separately if applicable .

20 percent responded that revenue increased 8 percent in 2020 and 100 percent in 2021.

20 percent responded with no change in revenue during 2020.

20 percent did not respond with revenue data for confidentiality reasons.

20 percent responded that U.S. revenue decreased by 51 percent or more in 2020.

20 percent responded that U.S. revenue increased by 31–40 percent in 2020.

20 percent responded that global revenue decreased by 51 percent or more in 2020.

CxO Survey Question: Have you recovered revenue to pre-Covid-19 levels? If yes, when? If not, when do you project revenue to return to pre-Covid-19 levels?

40 percent responded with yes.

40 percent responded with no.

20 percent did not respond for confidentiality reasons.

The average projected date when revenue is expected to return to pre-Covid-19 levels is 2022 forward.

CxO Survey Question: What percentage of your full organization was working remotely prior to Covid-19?

80 percent responded with 0–20 percent remote.

20 percent responded with 81–100 percent remote.

CxO Survey Question: What percentage of your full organization went to remote work during the pandemic in 2020?

80 percent responded with 81–100 percent remote.

20 percent responded with 41–60 percent remote.

CxO Survey Question: What percentage of your full organization is working remotely today (Q1 2021)?

50 percent responded with 81–100 percent remote.