Pandemic, Recession Feed WFH Boom

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By: Mary Jander

As the COVID-19 pandemic restrictions loosen worldwide, many companies are allowing workers to stay out of the office permanently.

The emergence of work from home (WFH) seems to have shown managers the economic value of telecommuting, while challenging them to make their networks more virtual, more secure, and easier to configure and manage.

And tech companies are jumping at the chance to help. In an odd twist, the pandemic and subsequent recession have accelerated the move to virtual services based on secure software-defined wide-area networking (SD-WAN).

COVID-19 Legitimized WFH Demand

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COVID-19 spurred interest in WFH and also revealed pent-up demand. According to consultancy Global Workplace Analytics, telecommuting has grown 173% since 2005, even though just before the pandemic, less than 4% of U.S. employees worked from home. The firm says that 75 million people, or 56% of the U.S. workforce that is not self-employed, have jobs they could do at home.

And these people are ready to telecommute: In a recent IBM survey of 25,000 U.S. workers, 54% of those polled said they now want to work at home permanently.

The bosses seem to be onboard too. They see how WFH saves office as well as technology costs. They are willing to grant that it enlarges the pool of prospective employees, which used to be tied to specific geographic areas, some with high costs of living (and salary demands). WFH also can stimulate employment in areas underserved by industry and help the environment by reducing emissions.

In WFH, Cloud Players Lead By Example

Companies like Facebook (Nasdaq: FB) and VMware (NYSE: VMW), which stand to benefit from WFH, are keen to encourage customers through example. According to CEO Mark Zuckerberg, Facebook plans to allow up to 50% of its 48,000-person workforce to telecommute within the next five to 10 years. And Pat Gelsinger, CEO of VMware, said in an interview in May: “We’re doubling, tripling, the amount of work from home." Prior to the pandemic, about 20% of VMware employees telecommuted, but Gelsinger anticipates that could grow to 60%, creating a remote pool of 18,000 workers.

All this has generated a tailwind for companies that offer a combination of SD-WAN, digital VPN, security, hybrid cloud integration, and wireless support. Enterprises are moving, albeit slowly, in an all-digital direction.

A recent Futuriom Survey for our 2020 SD-WAN Infrastructure Growth Report (subscription required) found that 65% of respondents said the COVID-19 pandemic has accelerated their look at technologies such as SD-WAN to enable better WFH networking.

Networking giant Cisco has also been playing up the trend.

“I will tell you that I have had a lot of customers … who realized during this pandemic that they have a fair amount of technical debt and they have a lot of aged equipment,” said Chuck Robbins, CEO of Cisco (Nasdaq: CSCO) on the company’s May earnings call with financial analysts. “[W]e don't know what the time frame is but many of them have said … this is a wake up call and this is going to actually give us air cover to talk to our senior leadership team about upgrading and building out a more robust modernized infrastructure.”

Other suppliers have gleefully taken the chance to flog their WFH wares in blogs, surveys, online interviews, and financial presentations. New products and services are proliferating. Versa Networks recently unveiled a solution called Versa Secure Access, which includes a secure SD-WAN-based gateway to cloud services that’s accessible directly from home users’ laptops and smartphones running Windows, Apple OS and Apple iOS.

It all seems to be working. In its latest earnings report in early May, Fortinet (Nasdaq: FTNT) credited WFH for contributing to an 18% increase in product revenue. In its latest quarterly report, VMware credited end-user licenses and cloud services for 11.6% year-over-year revenue growth.

The Limits of WFH

There are limits to how far enterprises will go to support remote work. Even in tech, many companies don't envision universal WFH. Apple (Nasdaq: AAPL), Amazon (Nasdaq: AMZN), Alphabet/Google (Nasdaq: GOOGL), and Microsoft (Nasdaq: MSFT), for instance, have sizeable segments that demand physical human presence — retail stores, warehouses, manufacturing facilities, labs, and the like.

“[T]he needs vary widely across different groups…. You can’t test whether something works in 5G unless you can actually be in that testing environment,” said Alphabet/Google CEO Sundar Pichai in an interview in May.

But the WFH trend has changed the outlook for many enterprises, and there's no going back. For many companies and their workers, the crisis may fade, but the office will stay at home.