How has COVID-19 impacted the growth of the video conferencing industry and the future of work?
Video conferencing technologies have been around as early as the 1980s. However, it was not until during COVID-19 when it became a popular form of communication for work. According to a recent study by Frost & Sullivan, the global conferencing services market is expected to grow gradually and reach $11 billion by 2023. (8) This research aims to illustrate how COVID-19 has led to the growth of the video conferencing industry and how this would affect the future of work.
1.1: The impact of COVID-19 on the video conferencing industry
COVID 19 has a large and positive impact on the video conferencing industry. The closure of organizations and the halt in global travel has led many to adopt video conferencing tools as a means of working while ensuring social distancing. For example, large organizations such as Google and Facebook have allowed their employees to be able to work remotely until 2021. (16)
Microsoft has predicted that COVID-19 would permanently change the way people work and learn. In May 2020, Microsoft has 75 million daily users for Microsoft Teams, with 200 million meeting participants in a single day. This is a 275% increase in the number of daily active users, as compared to before the pandemic started, in November 2019. (11) Likewise, Skype, owned by Microsoft, faced an increase of up to 70% to 40 million active users. (15)
Source: Microsoft 2020 Financial Statement
As seen from the data above, Microsoft beat Wall Street sales and profit expectations to report an increase in revenue by 14.6% compared to the previous year 2019. The largest increase would come from its services and others, showing a steep percentage increase of 26.6%. Moreover, the net income of Microsoft has increased by 22% to 10.8 billion. (18) This is due to the sharp demand in Microsoft Office tools and Cloud offerings, in a period when remote work is necessary.
At the same time, due to the growing demand for remote working services, it is natural for the sale of Microsoft windows PCs to increase as well. However, Microsoft is struggling with supply-chain issues from China, since most factories are still shut-down after Chinese New Year, (17) and global shipments have plummeted by 12.3%. (13)
Google Meets, a Google video conferencing platform, has also experienced tremendous growth. It is adding around three million new users each day on its platform and recorded more than 100 million daily participants in April 2020. (14) It has a 60% day-by-day growth, with 25 times much higher as compared to January 2020. (10) Furthermore, YouTube, which is acquired by the parent company of Google (Alphabet) has faced an increase in subscribers as a result of more people staying at home. Since the pandemic, there have been over 2 billion viewers for YouTube a month. (3) However, Youtube’s ad revenue has declined during March due to the reduced spending of advertisers.
Perhaps, the most prominent rise for a video conferencing platform would be that of Zoom. Zoom Video Communications, is a US-based company founded in 2011. However, by 2017, it has already reached a valuation of 1 billion. (9) With the increasing demand for video conferencing tools during the COVID 19 outbreak, Zoom gained massive popularity, with more than 300 million daily meeting participants being recorded in April.
Zoom’s total revenue for the beginning of the year was 188.3 million, which was a 78% increase as compared to 2019. (21) Zoom became very popular among companies for being very customer-focused. When it first debuted, it got many people to test out its products by offering a free under 40 minutes’ video conferencing call, provided it has less than 100 participants. (5) Moreover, users have stated that Zoom has better user experience and higher call quality as compared to other video conferencing services. (7)
At a time where remote working becomes the new norm during the pandemic, video conferencing technology would be essential to any company or organization. Thus, any company that sells video conferencing products would most likely face an increase in subscribers and hence experience a much higher revenue. According to a Gallup poll, about 60% of American workers prefer to work from home, after the pandemic is over. (6) Hence, it is likely that video conferencing technologies would impact the future of work.
1.2: How is the future of work going to change with video conferencing technologies?
Collaboration and communication are going to be key.
The use of video conferencing technologies has fundamentally changed internal and external company communications, thus heavily impacting corporate culture. (2) To be efficient while working remotely, the organizational culture would have to change — teams would have to be distributed and trusted with more autonomy to make their own decisions. (19) Companies operating on traditional hierarchical and bureaucratic models would find themselves having to adopt a more flat-out organizational approach. Although separated in teams, video conferencing connects these remote teams, providing the human connection which text messages could not convey. (4)
Remote work allocated to dispersed teams makes it hardly possible to adopt strict top-down micromanagement. In the future world of work where video conferencing is common, employees should strive to work collaboratively and set goals that the team can achieve, while keeping in mind the skills as well as constraints of each team member. It is even possible for a company event meant for relaxation to be hosted via video conferencing. Employees get to interact and play games with one another while video conferencing. (1)
With the increasing commercialization of video conferencing tools, companies, especially sales, would find video conferencing a much cheaper option than doing business trips. (12) Video conferencing ensures that clients all around the world receive live information, without having to travel unnecessarily. As video conferencing technologies become more sophisticated, it has the potential to be a form of disruptive technology to the airline industry.
That being said, there are always potential dangers to video conferencing in our work. With more companies using video conferencing tools, there are potential loopholes to be exploited. Zoom has faced backlash for only having end-to-end encryption for paid users, and it has since extended end-to-end encryption to all users. (20) Other video conferencing platforms have also sought to fix their privacy and security problems, such as requiring an elaborate password to be set for a meeting. Technical glitches may be common at the start, but it could be solved with the more sophisticated technology in the future.
1.3: The future of work — A combination of video conferencing and physical meetings?
Regardless of whether video conferencing would be the new norm, one thing is for certain at this uncertain time. Changes to the future of work are coming. Video conferencing has a long way to go if people want to be able to truly communicate with one another at a distance, without feeling that ‘distance’. As long as questions like ‘Can you hear me?’ and ‘Can you see my screen’ continue to be heard in video conferencing meetings, video conferencing tools can never fully replace physical meetings. While COVID 19 has made video conferencing tools a necessity for large and small organizations alike, it is possible that a combination of video conferencing and physical meetings will define the future way of work.
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