Airbnb was one of the first Silicon Valley tech companies to send employees home in the wake of COVID-19. The tourism and hospitality giant, renowned for its generous flexible work perks, already had the technology, practices, and culture in place to continue business operations remotely, and was as well-positioned as any to weather a massive work-from-home event.
As all forms of nonessential travel came to a halt, however, the company’s outlook wasn’t so great. Airline travel dropped 96% in April compared to the same time last year, and according to AirDNA, bookings of Airbnb listings plummeted around the world (Beijing saw a 96% decrease). To save on overhead, Airbnb was forced to cut 1,900 of its 7,500 employees—a 25% downsizing and one of the largest layoffs reported during the COVID-19 era.
The unprecedented nature of COVID-19 caught most organizations off guard, and despite how ready organizations were to embrace remote work, many of them were still adversely affected. Remote work helped companies like Facebook, Microsoft, and Google endure the lockdowns and keep business operations moving, but others such as Airbnb weren’t so lucky.
Business priorities are changing
The unfortunate reality is that in times of crisis, nothing is certain. Organizations just as prepared as others might undergo more damage simply due to the nature of their business. Recovery plans should include the ability to scale operations to accommodate changing business needs and structural cost cuts.
For example, reducing staff was an unpredicted yet necessary change for companies like Airbnb, and many organizations are likely to follow suit. A recent Gartner survey on 161 finance executives found that 34% of organizations plan to furlough staff and 25% plan to reduce their workforce, among other actions such as hiring freezes and reduced salaries. Similarly, a recent PwC study on 867 CFOs found that 49% anticipate changes to their workforce as part of their post-COVID cost-containment strategy.
Whether organizations shrink or expand their workforce in the coming months, the bottom line is that technology must scale accordingly. Less staff means fewer users on a system, providing an opportunity to scale down capacity and cost. Once an organization recovers, IT teams might need to scale up their technologies to support an increase in staff.
It’s time we recognize the role scalability plays in helping organizations survive and thrive in periods of recovery. Here’s why cloud technology is so important.
The issue with on-premises infrastructure during disasters
As soon as people were mandated to stay at home amidst the pandemic, Netflix subscriptions for the first quarter surpassed original projections by double. After all, when you’re trapped at home with nowhere to go and nothing to do, Tiger King makes for superb entertainment.
The massive influx of new subscribers, however, meant Netflix needed to scale up quickly to meet the spike in demand. The company’s hybrid cloud model—with Amazon Web Services (AWS)—allowed it to effortlessly scale up cloud capacity and continue operations without any interruptions for end-users. As Dave Temkin, VP of Network and Systems Infrastructure at Netflix, said during a webinar, “We’re seeing that, generally, nothing is absolutely melting down. It is scaling quite well, both our system and other people’s systems.”
Netflix’s reliance on cloud infrastructure might have saved the company from a possible uptime disaster, but many organizations with on-premises infrastructure won’t have the capability to scale workload capacity in the same way. Traditional on-premises systems often rely on older software architectures that can be complex and inflexible. As a result, businesses aren’t able to quickly adapt and respond to evolving needs.
In periods of recovery, however, flexibility is key. For example, organizations experiencing rapid business regrowth in the post-COVID-19 era can quickly outgrow servers. On the other hand, organizations experiencing slower regrowth might end up with extra capacity while paying for licenses and tech support. This amounts to extra, unnecessary technology expenditures at a time when money is especially scarce.
Why cloud scalability matters
Scalability allows organizations to optimize costs wherever possible—and in periods of recovery, money matters. If an organization with on-premises architecture is suddenly operating at half capacity, that’s extra money down the drain in maintenance, security, real estate, and personnel costs. Companies need to optimize their IT productivity to ensure a rapid and efficient disaster recovery. This is where public cloud’s scalable architecture comes in.
Public cloud solutions allow organizations to customize services for their changing business needs and require no major commitments to service providers. For example, the amount of cloud-based communications tools (such as unified communications) are expected to skyrocket as 74% of companies plan to permanently shift to more remote work in the post-COVID-19 era. Cloud communications providers can easily meet the surging demand for remote work tools and work closely with organizations to cater to their unique requirements. As those organizations continue to grow, the cloud grows with them. – Read more
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