What the Tech? Infrastructure of Remote 3.0

This What the Tech? event focused on “Remote 3.0” – the in-person/virtual hybrid workplace that is quickly evolving as the COVID-19 pandemic recedes. The panel discussion featured Microsoft Principal Corporate Counsel Nick Austin, Zane Venture Fund Managing Partner Shila Nieves Burney, OFS Senior Director for Solutions and Professional Services John George, and Newmark Sr. Managing Director Taylor Senter. Womble Bond Dickinson Business Litigation Partner Mark Henriques moderated the discussion.

The pandemic may be ebbing, but what does that mean for work? The post-pandemic period is morphing into the most dynamic work environment most companies have ever experienced. Connectivity now allows people to conduct business and live their lives in ways that seemed impossible just a few short years ago.

But what is the impact of this connectivity revolution on businesses? On work processes? And on employees themselves?

Microsoft’s Work Trends Index 2021 found that more than 70 percent of workers want remote, flexible working options. But 65 percent also say they crave more in-person time with co-workers. Also, 82 percent say productivity has increased or remained steady during the past year, as early pandemic fears of a massive drop-off in productivity proved unfounded as workers and employers quickly pivoted to the remote work environment.

“But we’re seeing human costs, with 54 percent saying they feel overworked and 39 percent report feeling ‘Exhausted,’” Henriques said.

Companies that best answer these questions will be the most prepared to thrive in a new economy—particularly as talent increasingly becomes critical to organizational success.

How is the Remote Work Environment Changing?

The panelists agree—the workplace isn’t returning to the pre-pandemic, in-person model, but it also won’t be exclusively virtual, either. Instead, they believe employers and employees alike will embrace a flexible hybrid model, in which employees move seamlessly between virtual and in-person work, largely depending on their job responsibilities.

“Here at Microsoft, we’ve embraced the hybrid model,” Austin said. “We need to use technology to help us merge the gap between the physical and virtual.” 

He noted that while he normally works in Atlanta, he was joining the presentation from the company’s Seattle headquarters in a meeting room designed to accommodate both in-person and virtual attendees.

Senter said, “Hybrid working was already here before COVID, but COVID accelerated the trend. Absolutely, hybrid is here to stay.” 

But he said we are in an uncertain period. People aren’t sure what to do, and working decisions can vary greatly by geography and sector, he said. Some companies are being more forceful about pressing workers to return to the office. But they may risk losing those employees in a highly competitive labor market, Senter said.

Burney: “In the tech space, once COVID hit, we were like, ‘What can we do online?’ We’re still doing that, but folks also want to be back together. The hybrid model is the model people want—as long as there’s no reduction in productivity.”

She also noted that companies have adopted a wide range of technology solutions to facilitate remote work. At Zane Venture Fund, for example, Burney and her colleagues have employed Notion (a project management tool), Airtable (a customer relationship management, or CRM, platform) and Slack (a business communications app).

“You don’t have to go into the office to get work done,” Burney said.    

Tech Infrastructure in the Post-Pandemic Era

Creating a hybrid workplace involves more than balancing workplace needs with employee demands, though. It also requires a technology infrastructure that allows workers to shift from in-person to remote without hiccups.

George said that when pandemic began, “We saw a massive increase in network traffic and a doubling in video conferencing overnight. Many people were having to ration bandwidth at home.”

But while employees and businesses found makeshift ways to get work done during the pandemic’s early days, companies now are looking at investing to make sure they have the right permanent, long-term tech infrastructure in place. George said adding optical fiber cable is particularly important to handle the nation’s increasing appetite for bandwidth.

Bandwidth demands continue to grow 25 to 30 percent every year, George said. Current average speeds are 180 Mb/sec download and 60 Mb/sec upload per home. But George sees that demand growing to 2 Gb/s download/upload in 10 years. He also said low latency (meaning little to no lag time in streaming) is another key broadband performance factor to consider.

“That’s driven by these new virtual applications,” he said. However, he said only 43 percent of US homes have fiber broadband available, and 60 percent of commercial buildings are connected to high-performance fiber networks. 

“Once that fiber cable is installed, it will last many decades,” he said.

In addition to a massive network of fiber cable, growing broadband needs will require data processing facilities. George said so-called hyperscale data centers are growing quickly. These massive facilities typically house thousands of individual servers and provide the computing and data storage capacity needed by the largest tech companies. 

There currently are 700 such hyperscale data centers worldwide, nearly double the total from just four years earlier. For example, Meta (the parent company of Facebook) recently announced plans to build an $800 million hyperscale data center in Kansas City. 

On the other end of the spectrum, companies also are “pushing out to the edge,” as George puts it, by building smaller data centers closer to the end users. In the future, these small-scale data centers could be built in conjunction with electric vehicle charging stations, he said.

George also said existing infrastructure can be upgraded with fiber cables, meaning companies don’t necessarily have to build expensive new pathways facilities in order to deploy the necessary tech infrastructure. 

“We’ve got a lot of new technologies to make that happen,” he said. “The pandemic has accelerated the trend to add fiber.” However, recent global supply chain challenges may make it more difficult to build out fiber as quickly as company leaders would like, at least in the short term.

The Workplace of the Future

So fast-forward to 2030 or some other point in the not-too-distant future. What will life be like for the average American, both at home and at work?

“Virtual” is the word to watch. Austin has an insider’s viewpoint with one of the companies working to develop this new reality.  Indeed, Microsoft’s recent acquisition of Activision Blizzard marks its entry into this virtual reality world.  Austin offers the following example:

“You go with to your spouse to a concert. You drive there, you might get some popcorn and buy a t-shirt of your favorite performer. The Metaverse or digital universe or whatever we are going to call it is really the same thing,” he said. “You go to your residence and use your technology devices to immerse yourself in a digital world. You purchase a hotdog and it’s delivered—maybe by drone—to your house. You’re watching your concert in real time through your goggles or whatever device. The digital world is replicating that experience virtually.” 

Many business meetings likely will be conducted similarly. Instead of a group of team members from around the country flying to a central location or dialing into a video conference call, they all will stay where they are physically and gather in a virtual space, where they interact with other participants in a way that simulates in-person interaction. 

Austin notes that such a digital universe will create a wide range of legal questions, particularly surrounding issues of privacy and regulatory matters.

But even in an increasingly virtual environment, Senter companies still need and want office space. He has observed what he calls “a profound trend of flight to quality” in picking post-pandemic office spaces. Companies want great locations, even if they aren’t the cheapest spaces. They may be looking to reduce space but not spend, in other words.

Newer office designs don’t have as much space for “head-down” solo work because employees can just as easily do that at home now. If people are coming to the office, they want to collaborate and office designs increasingly are reflecting that, Senter said – there’s a focus on “we” space versus “me” space. This includes incorporating outdoor space where people can gather, as well as hospitality areas.

Remote 3.0 – Human Infrastructure

As Henriques noted, the remote work environment may be popular, but it has proven stressful and exhausting for a significant segment of the workforce. Also, while virtual work has proven both efficient for employers and popular with employees, many corporate leaders still take a dim, old-school view of the concept, Senter said.

“Most CEOs want people to return in person, even if they won’t say that publicly,” he said. “The challenge is employees don’t want to come back.” He believes that when the labor markets become more favorable to management, they may push harder for employees to be back in person.

Austin said that competition for talent—which is notoriously fierce in the tech industry—has led Microsoft to create an employee-driven work environment. 

“Microsoft said, ‘This hybrid model is what works best for you.’ Employees are encouraged to discuss with their supervisors about what works best for them,” he said. The goal is to have happy, productive employees – which in turn allows Microsoft to be more competitive in recruiting and retention, Austin said.

But as Burney said, “Hybrid works for some. It doesn’t work for those who want to be in the office full-time,” and companies need to be sensitive to those needs as well. She noted that many companies are planning hybrid events with in-person and virtual attendees.

She also said that on-demand collaborative spaces are popping up in markets around the country. Some of these spaces are even for specific groups, such as women entrepreneurs. 

Geography is another quality-of-life consideration that has changed in recent years. The Sun Belt is booming as a commercial real estate market in the pandemic recovery, Senter said, and he called Midtown Atlanta “as hot as any market in the country.” But major Northeastern markets aren’t faring as well, he said.

“Companies know what types of employees they need, and we can do the data studies to show where those employees are located,” Senter said. Employers then are using these types of advance metrics to make decisions about where to locate facilities, and these may be in urban, suburban or exurban areas.

George noted that virtual work has opened up rural areas as options for workers. But those areas need the same high speed broadband access available in cities and suburbs.  The goal should be a “seamless virtual experience regardless of where we are,” he said.

“In a war for talent, it’s nice to be where people want to live,” Henriques said.

Moving forward, the panelists agreed that diversity is becoming increasingly vital in economic recruiting, both for companies and for markets. 

Burney said a diverse professional workforce and entrepreneur base is one of Atlanta’s strengths—and one key reason why the market is growing rapidly as a hub of tech innovation. She noted that there have been several recent tech start-ups launched in Atlanta by Black women that have led to successful acquisitions by larger companies. For example, Atlanta entrepreneur Jewel Burks Solomon founded Partpic, a tech company that makes it easier for companies to maintain and replace machine parts. Partpic was acquired by Amazon in 2016.

However, Burney said Atlanta has a “capital mismatch,” in that it can be hard for entrepreneurs, particularly those from diverse backgrounds, to find adequate capital. Zane Venture Fund is working to bridge that gap, providing start-up capital and strategic support to Atlanta-area entrepreneurs, including many with diverse leadership teams. Zane Venture Fund’s backers include Calendly Founder/CEO Tope Awotona, whose Atlanta tech company is now valued at more than $3 billion. 

The workplace of 2032 will likely be quite different from the workplace of today. Companies that plan and invest accordingly—in tech infrastructure, collaborative office space, and perhaps most of all, human capital—will find themselves better positioned to meet the challenges and opportunities of the Remote 3.0 world.

This article is based on a March 22 Womble Bond Dickinson thought leadership series event.

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