Omdia: New norm for working set to have ‘dramatic’ implications for collaboration industry

Since lockdowns were imposed by governments around the world to prevent the spread of Covid-19 coronavirus, and as they are extended, home working has become the new normal and has meant a substantial upward recalculation in the predicted uptake of collaboration and communications services.

According to industry analyst Omdia, the coronavirus is changing everything about how people work, and will do so permanently. It added that even though the working world was experiencing unprecedented uncertainty, there were two things that should be borne in mind: the virus will pass, and at the other side of the pandemic, the world of work will look very different.

Each year, Omdia forecasts the collaboration market for equipment and services in its Enterprise telepresence and video conferencing equipment market tracker. Its latest report, published in early 2020, predicted 7% growth from 2019 to 2020, and its equipment forecast for the likes of telepresence and video conferencing predicted growth of 6% from 2019 to 2020. The web/video conferencing services market was forecast to reach a value of $4.91bn in 2020, growing by 6.8% annually, described by Omdia research vice-president, service provider and communications, Evan Kirchheimer, as “tepid”.

Kirchheimer said that to date the so-called “transformative” promise of collaboration tools rested mostly in the marketing messaging of suppliers, despite their best efforts to encourage widespread business uptake. But in the past month, he said, everything has changed.

He noted Microsoft’s claims at the end of March that demand for its Teams collaboration product had surged to 44 million daily active users, with an additional 12 million regular users in the week to 26 March. This compared with an adoption rate of 20 million in November 2019.

The good news for the collaboration industry, he said, was that once collaboration tools are embraced, they are rarely cast aside. And, as he told Computer Weekly, even if it was too early to assess just how sticky this uptake was, there could be a fundamental shift in dynamics on the cards.

“Even if we just look at the raw data and assume only a small per cent of these new users ‘stick with’ the technology, the implications are dramatic. If just 20% of those new users continue to use Teams in the long term, that would be a 25% increase in Teams use – from 20 million to 24.4 million regular users,” he said.

“The data from Zoom is much more dramatic. On 31 January, we saw close to 110,000 downloads of Zoom across iOS and Android. This was Zoom’s busiest day in January. On 25 March, we saw 2.7 million downloads. That’s just under 25 times the download rate of its busiest day in January. Again, even if only 10% of those downloading Zoom use it longer term, it’s a huge percentage growth in regular usage. This is transformational.”

And this transformation, added Kirchheimer, is set to see home broadband, not business broadband, become the lifeblood of the economy. This would mean a dramatic impact on network architectures.

“If more bandwidth is consumed in homes, then this places pressure on local exchanges,” he explained. “This could lead to a further acceleration of edge technology deployment as providers want to guarantee customer experience for video or gaming, and virtualisation to more dynamically allocate resources through the day to deliver better voice and data service quality.

“Furthermore, there’s a ‘local’ challenge too, or what we’d call on-premise. Anyone who’s used collaboration tools like Teams on a corporate LAN can testify to the fact that the quality of the local area network, including campus Wi-Fi, is a critical factor for user experience. One issue with using collaboration tools such as Teams is that even if the user is conducting a voice-only session, the pipe allocation is not terribly efficient. Corporate LANs have been upgraded to deal with this demand. Home Wi-Fi? Not so much.”

But the analyst expressed satisfaction in the way network operators have, to date, been coping with the challenges of the new working environment and handling the change in traffic patterns and the increased demand for services at home.

He cited research suggesting that the growth in traffic in the past month had been as much as operators typically face in an entire year, concluding that the network challenge was not just about where traffic was – at home or at the office – but how much there was, and that this was also a new normal for operators.

“It’s interesting to try to think through operator investment rationales to keep up with demand – further metering data consumption on residential plans to fund investment may not be a welcome development in this political and economic environment,” Kirchheimer concluded.