By Fernando García, Vice-President and General Manager of Vertiv Latin America
We are living through a decisive moment in history. The health crisis that we are experiencing has changed every aspect of our surroundings, causing social and economic impacts that will be difficult to predict. However, this is the moment to face these changes and prepare for the work that they will demand of us.
For several years, we have been speaking with our partners and clients about the need for a digital transformation in businesses and how Vertiv can help. This crisis has not only confirmed that a permanent change is coming in how we use technology, it has also proven that the economy’s digital transformation is occurring at a faster pace than previously thought, giving rise to a hyper-connected society.
What does this transformation look like? Concepts like smart cities, distance education, telehealth or telecommuting may sound like ideas from the future, but now more than ever, these words have become part of our everyday vocabulary. We are seeing the impact of what I refer to as the five vectors of digital transformation: decentralization of the population, distribution of entertainment, the relocation of work, education and health, offshoring of the supply chain and the greening of the economy. Although we used to believe that these pillars would take years to develop, this crisis is making each one a reality right before our very eyes and in real time.
Decentralization of the Population
As a result of this crisis, governments have had to create and accelerate the implementation of digital services. These include e-government and virtual offices that enable governments to help their citizens in a variety of situations. The need for greater capacity in government portals has led to several governments taking steps to approve the expansion of the radio spectrum, which can help speed up the deployment of 5G networks.
The idea of smart cities includes efforts to keep citizens safe, with a variety of technologies available to help with social distancing. These include urban monitoring using video cameras, geolocation measures to trace vehicles and telephones, home delivery using robots and drones, and the development of various driverless or autonomous services. Many of these innovations have been in the pipeline for some time, but we are now seeing an acceleration in the pace of change.
Distribution of Entertainment
Entertainment content now encompasses real-time experiences with games, movies, concerts or sports. With most professional soccer leagues and sporting events canceled, eSports platforms have filled a gap. The way we entertain ourselves has permanently changed: we consume streaming video in massive quantities, participate in multiplayer games and attend virtual concerts. All of these platforms put communications networks under considerable stress, as demonstrated by Netflix and YouTube having to reduce the definition of their streaming video because networks had become saturated in Europe. We are witnessing a major shift in entertainment, with the ever-greater increase in augmented and virtual reality systems, through which we can travel, visit museums and participate in events from our home using immersive AR and VR systems.
Relocation of Work, Education and Health
A health situation this critical has forced us to adapt to new ways of working, studying and going to the doctor. We have had to build offices in our homes and deal with the speed of our wireless network, since everyone, children included, needs the bandwidth to attend virtual meetings and classes. This relocation, which has been forced upon us due to stay-at-home orders, will permanently change the way in which we interact from now on.
Health is a fundamental aspect of our lives. Even though advances had already been made in telehealth, it has come to the forefront in recent months. Online services, self-service and virtual diagnostics are part of the changing nature of medicine, along with videoconferencing with doctors, psychologists and other specialists.
Offshoring of the Supply Chain
We have begun to see how so-called smart factories are adopting process automation to reduce the number of people working in the factory. Global dependence on the Chinese supply chain is changing, with many companies seeking other alternatives to have manufacturing centers in other countries. Furthermore, companies are reaping the rewards of working with different suppliers of components and services rather than relying on a single supplier. This has boosted 3D printing, which can customize or differentiate a product even after it has been made. It also gives businesses the ability to manufacture almost anything on-site, as we are seeing with the on-site 3D printing of PPE, respirators and other critical equipment. Another consequence of this crisis is the accelerated adoption of home delivery platforms for just about everything. Indeed, pilot projects featuring home delivery using autonomous vehicles or drones are already underway.
Greening of the Economy
Finally, the need for these technologies to contribute to the greening of the economy is self-evident. Environmental sustainability strategies that seek to reduce the carbon footprint of the economy have come to be known as the Green New Deal. Telecommunications networks and large data centers consume immense amounts of electricity, leading to a carbon footprint larger than the air travel industry. We have to see how telecommunications operators and the main players among internet companies will increase renewable energy use, energy efficiency and the optimization of natural resources.
The Future Is Our Present
This acceleration of t digital transformation represents a significant challenge for mission-critical infrastructure such as data centers and edge computing. The main challenge of the coming months and the next year will be centered around speed, scalability and complexity, both in the core and at the edge. It will be important to deploy new locations at record speed, implement and use tools to remotely administer and monitor processes online, as well as managing and dispatching technicians remotely. All of this will increase the complexity required to manage and administer this infrastructure.
Once the current health crisis becomes a thing of the past, we will be faced with a new normal in which our capacity to adapt will be of utmost importance. The consultancy McKinsey & Co. provides a list of five horizons to inform our thinking and actions:
Resolve: Short-term measures to meet the challenges created by the virus and seek to protect employees, clients and productive processes that we depend on.
Resilience: We have to strengthen the measures that allow the company to survive once this is over, starting with the company’s cashflow. Taking drastic measures now will be useless if there is no company left at the end of it all. We have to strengthen our financial health and expand our capacity for resilience during forced stoppages.
Return: We have to create a detailed plan that will allow us to scale up and recover the business quickly as soon as the conditions, context and economic outlook improves.
Reimagination: We have to imagine what this ‘new normal’ is going to look like. We won’t be going back to what we had before. It will be necessary to reinvent ourselves and imagine what that means for each of us, our companies and our departments. We need to visualize how the changes of today will become the permanent reality of tomorrow.
Reform: Much will have to change in our industry in terms of the legal and regulatory context. We have to be prepared and adapt to these changes in the medium and long term.
If the last decade has been characterized by the ‘sharing economy’ and the migration to the public and private cloud, the next decade will witness a movement in the opposite direction, towards the edge of the network.
As we deal with our current economic situation, it is essential that the economy accelerates its transformation towards a digital, hyper-connected world. That’s the simple truth. Trust in strong partners who understand the challenge and who have the resources to help your company to take the steps it needs to in order to be competitive in this new economy.
