The Month The On-Prem Died

It’s undoubtedly too soon to be writing definitive analysis on the ramifications of the coronavirus plague on the business world.  But, it’s certainly a topic many are thinking about and so in the spirit of contributing to that thinking, here goes anyway . . .

March 2020 will be remembered as the month the on-premises IT infrastructure died.  On-premises phone systems, email servers, database servers, and application and feature servers of various kinds are now dead and buried as a responsible approach for businesses to support their operations.  The laggard’s reluctance to migrate to the cloud due to prioritization of cost savings, perceived better control and security, and purported ease of integration has been dramatically discredited.  

Typically the well-known adoption curve has a long tail as laggards reluctantly convert or leave the workforce.  This long tail generally encourages the small percentage of stubborn laggards to resist and can preserve a sizable market for providers and maintainers of legacy systems.  My prediction is that this month disrupted that pattern for multiple categories of premise-based business technology. Businesses that are struggling today to receive or manage inbound calls, communicate and collaborate, access and share information, or perform other vital tasks can no longer say two things:

1. There are advantages to having vital business systems on-premises that outweigh the benefits of the cloud.
2. The cloud is just as vulnerable to many common threats and it’s not a clearly better approach in all respects.

Those statements just ceased being relevant.  The coronavirus has forced nearly every business to operate outside its premises and with all it’s employees working from home -- and to do so for weeks and perhaps months.  And, sadly, coronavirus could come around again later this year or next year or another pandemic could befall us. Having vital business systems within a premises that your employees can’t work from or even access easily for weeks or months makes zero sense.  And this is the new reality.  

So here’s what I think will happen when this pandemic and the associated business closures end: companies that weren’t already setup to maintain productivity with their workplaces closed will prioritize changing that and companies that have been selling and supporting on-premises business technology, like phone systems, servers, and other appliances, will need to reposition themselves to help their clients transition to the cloud.  The laggards will adopt quickly and the long tail has been chopped off. Thinking about what this means for your business and markets you are exposed to could be a good use of the extra time those of us that can’t endure an unlimited diet of Netflix (and, believe me, I’ve tried) seem to have in abundance. Godspeed.