Covid-19 may well push the world over the Digital Transformation edge.

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Hong Kong, March 30 — Iconic international luxury brand merchant, Tiffany’s closed all 12 of its shops here, as reported in the South China Post yesterday.

Perhaps this might be seen as a superfluous casualty of Covid-19. After all, it isn’t immediately apparent that life and death hangs in the balance if a Tiffany’s retail store closes. Nonetheless, in the time-space of an instant, we have been handed a very new understanding of the difference between the “real” world economy and the new “digital” and “virtual” one that will replace it — if it hasn’t already. 

It is doubtful that the global economy, society and culture will ever look the same again. Nor should it, really. In other words, there may be no such thing as a “recovery” of the world’s economy, rather, but, a reinvention. All the digital technologies, the “apps,” and all the know-how to do this is now present, fully formed, and requires only the digital infrastructure that enables, supports, secures and propels it.

This may well prove to be a (if not the) defining moment in the transition to the Fourth Industrial Revolution (4IR), the Digital Transformation (DX) of the global economy. Today we sit smack-dab in the middle of a five-year projected annualized spending growth rate of 18.1%, according to research analyst firm, Markets & Markets. Accenture in a report prepared for The World Economic Forum, “The Digital Transformation of Industries” says it is a $100 Trillion global digital ecosystem that is “at stake” by 2028. 

While we have been rapidly trending in this direction for quite some time, our guess is that with the cause and response to the pandemic,  we may have just unwittingly hit the literal hockey-stick inflection in growth rates of Internet traffic and data volumes that underscore this technological transition. 

So, will the Internet’s backbone snap under the Covid-19-induced stress? Will the Cloud fall as dew? Likely not, but there are some interesting observational waymarkers on this lightspeed journey.

Microsoft has been forced to throttle back on Xbox performance in Europe, issuing this support note two days ago, “To streamline moderation and ensure the best experience for our community, we’re making small adjustments. We’ve temporarily turned off the ability to upload custom gamerpics, club pics, and club backgrounds.” (I wonder just how long it took the marketing copy-writing folks to nuance that explanation that they were fresh out of bandwidth?)

This comes amidst Microsoft Azure Cloud services experiencing demand growth beyond 775% of its pre-pandemic normalcy. This velocity of change for Azure keep pace with world-wide directives for locking-down movement, quarantining,  sheltering-in-place and social distancing have forced world-wide closures of corporate offices, all of the worldwide main street and industrial production and distribution, except in the case of named essential services. 

(Incidentally curious to learn that in Boston — actually the whole state of Massachusetts —  liquor stores are considered essential services. We now do live in an altered state, do we not?)

One useful definition of Digital Transformation (DX) is that it is digitalization (through the combination of a host of well-developed technologies) that results in exponential change — sometimes not predictable. Can a DX moment be outside-event-caused? Is there one staring you in the face right now? We say yes. Here’s just the tip of “why”:

By way of example, Covid-19 has exponentially decimated the airline industry worldwide. Business travel, whether commuting from home to work, or travel of any kind for face-to-face meetings and for conferences has all but disappeared. While it is too soon to say what the real impact has been in North America or Europe, the early results from the Asia-Pacific region tell the story for what we’re likely to soon learn. 

In ocean freight shipping, according to one freight-forwarder, shipping container capacity between Europe and Asia dropped by 45%. The US ports of Los Angeles and Long Beach are experiencing a dramatic plunge cargo. Already challenged by the lingering effects of the tariff war with China, the novel Carona virus has driven down import landing volumes. “We are more interconnected than ever with our global partners, so it’s no surprise that transpacific maritime trade has been significantly impacted,” said Port of Los Angeles Executive Director Gene Seroka was quoted as saying today in The Maritime Executive.

On-Line Learning’s steep ascent

One digital mixed and interactive learning media industry has plodded along for decades, but suddenly it has become the only way to deliver knowledge content. Kahn Academy is instantly vindicated and validated.  

Already stressed, Internet bandwidth now has to meet the urgent demands of the delivery of educational curricula digitally and interactively online, both synchronously and asynchronously. 

With education facilities — at all levels and globally — shut down for at least the balance of the first-half academic year (The World Economic Forum says its a billion students out of school), institutions are rushing to find remote two-way digital video alternatives to traditional classroom instruction. This to ensure their institutions can fulfill their primary charters and continue to have a post-pandemic future. 

Digital First 

In the corporate enterprise environment, these digital interactive mixed media technologies may now be well baked-into the culture already. Remote work-from-home, however, causes a dramatic shift in, first, the telecom networks, internet and computational volumes to be managed, but also in the shifting resources from very high-performance enterprise networks to external Internet-based WiFi, mobile and wireless devices. It’s not new; what’s new is the volume and its security.    

Suffice it to say, across all industry, services and public sectors, the global pandemic is wreaking havoc. Each, in its own way, is being forced to quickly adopt and adapt digital technologies in such a way as to hopefully by-pass the immediate obstacles thrown up by Covid-19. While a much longer discussion is to be had, and while the pandemic is profoundly, life-alteringly serious, it does pale in comparison to the fast-coming existential impacts of climate change. This is a fast-track warm-up to what’s coming at us. 

 However, the longer that these Covid-19-caused physical barriers to human activity remain raised, the greater the opportunity to take on Digital-First technology solutions to both work around the obstacles and to find new innovative shifts in performance that may radically surpass and reinvent beyond past experience. 

“To Zoom”, verb transitive

Instant “beneficiaries” are conferencing platforms and messaging apps.  Zoom, Google’s Hangouts, Microsoft’s Skype, FaceTime, WhatsApp and others all have now become the tools of not just social communication, but more importantly as ways to replace the face-to-face meeting and to transact business. Skype can be used both to check-in with old Uncle Freddie, and to move business along in a higher quality way than audio only can. Anyone not understanding this may wish to go back and reread Clayton Christensen’s “Innovator’s Dilemma,” published in 1997, to get that it is not always the superior mode of anything that wins the in the markets.   

3D printing/additive manufacturing, another DX technology is proving itself in the decentralization and agility of printing face masks and respirator parts to fight Covid-19 transmission and treatment.

Elsewhere in the Internet of Things realm of DX, robotics and drone technologies are manning the Covid-19 defense ramparts. And the importance of AI and ML in big data analytics and predictives are crucially deployed at every layer of the healthcare informatics in combating the pandemic. Think AR and VR have no role in the battle? Think again. 

However with DX technologies comes a corresponding demand impact on the existing Digital Infrastructure that makes it all possible. The Coronavirus has generated a near-instant DX moment. YouTube, owned by Google, Netflix, and other streaming services have already been forced to temporarily reduce the quality of service in Europe as people move off corporate ethernet and fiber networks in their offices to telecom-supplied WiFi fiber cable networks and to mobile/wireless devices. 

Critical Digital Infrastructure 

IR4 and DX are entirely dependent upon the condition, capability and capacity of the modern Digital Infrastructure. Item number six on Mckinsey’s recent Executive Briefing for CIOs during the pandemic was a reminder of this and was focused on the mission-critical infrastructure.

Covid-19 has forced a dramatic increase in the “Five Vs of DX” — (we’re adding a fifth to the IBM Big Data descriptors of Volume, Variety, Velocity and Veracity, namely Value. 

Digital Transformation will cause a dramatic and truly transformational shift in the way economic value is determined, ascribed, and measured, and with that 4IR shift comes a necessary realignment in the value of the full digital infrastructure stack as it increasingly becomes the “means of production.”

One of the not-so-very-hidden results of the journey of digital transformation is that a very large part of the new economic  “value” it creates is in the as-yet not fully recognized carbon reduction, both in the energy required to “produce” value and in the drawdown in embedded carbon as the digital transformation economy increases the value of data over carbon-based material. 

Any question about global disruption?

An interactive digital video-delivered learning curriculum eliminates — what would we guess? — perhaps, 90% of the carbon footprint of physical building/classroom-delivered coursework? With far less friction, and a great deal greater velocity, reach, and agility. Is it the same as face-to-face? Probably not, most educators think not. 

But here’s the thing of it: the longer we go down this path of lockdowns on mobility, social-distancing, sheltering in place, the more we seek effective, useful, even pleasurable ways of being. 

Breaking old behavioral habits and forming new ones happens surprisingly quickly, researchers at University College London have found. A lasting change in behavioral pattern (a habit) can be accomplished in as little as 18 days or as long as 254 days, with the average being 66 days. Academics are now delivering courses every day all over the world online. The jury hasn’t delivered a verdict yet on ultimate effectiveness, but that doesn’t mean that the world of learning hasn’t now been disrupted. 

If the pandemic shut-down continues apace for, perhaps, two months more, and quite possibly longer, any question that the bricks and mortar (and carbon) days learning have been fundamentally and profoundly altered. The DX of learning is taking place right before our eyes.

Now look about you. How many opportunities across all industries for this kind of innovation, disruption and transformation can you see before you? 

While the Covid-19 pandemic is causing increasing suffering, loss and death (and I minimize none of that at all), it signals the true entry into the global Digital Transformation Era that holds the promise of healing the planet.

And, therein, lies the “why” of the continuous-improvement journey toward sustainable, reliabiable, resilient, secure, and high-performance Digital Infrastructure.


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