Technology trends driven by the coronavirus pandemic — such as the shift to remote working — will continue after a vaccine becomes available, according to the former boss of IBM.
Ginni Rometty, who serves as IBM's executive chairman after stepping down from the CEO role this year, predicted that digital technology will continue to transform the way businesses operate even as the world returns to some level of normality with the advent of a vaccine.
Her comments came on the heels of an announcement from drug maker Pfizer that its coronavirus vaccine is more than 90% effective in preventing Covid-19 infections. Major stocks that benefit from people staying at home due to the pandemic — like Zoom and Netflix — fall sharply following the news.
She added that remote work is "here to stay" and will become part of a "hybrid" model of working that sees some people working in offices, while others stay at home.
A vaccine "allows us to return to perhaps a bit of a more new normal," Rometty said. "But a number of these things in the hybrid way of working I believe will remain, and the digital acceleration will continue because people have now seen what is possible."
In addition to setting off a wave of telecommuting around the world, Covid-19 led to increased demand for digital health services and education. In many countries, teachers and doctors, as well as students, parents and patients, were forced to adjust to virtual ways of accessing school lessons and health appointments.
Several countries across Europe have reentered nationwide lockdowns in recent weeks in a bid to slow a resurgence in coronavirus cases. But some investors question the extent to which pandemic-linked trends in tech will continue if a vaccine allows a broader reopening of economies around the world.
"Years" of innovation that pre-dated the coronavirus let many businesses go digital at the start of the pandemic, but Rometty said there are "different paces of investment" when it comes to cloud computing —a data structure that lets companies access information that's stored on remote databases rather than locally. Aside from IBM, cloud services are sold by rivals including Amazon, Microsoft, Alphabet and Alibaba.
IBM announced in October that it will spin off part of its information-technology services business so that it can focus more on cloud computing, which is growing faster and has high margins. IBM shares spiked on the news but have since pulled back by about 10% from those highs.
"If you think about it, the world's only 25% into a cloud journey — there's another 75 to go," Rometty said. "The reason that 75% has not moved yet? It's the difficulty of either refactoring those applications or modernizing them."
IBM, she said, is "squarely focused" on what it calls "hybrid cloud" technology that combines private and public cloud services and gives companies more flexibility around the services they require. The firm bought Red Hat, a major distributor of open-source software, in a bid to push that hybrid strategy.
IBM has trimmed its older businesses over the years to focus on the cloud, in an attempt to make up for slowing software sales and seasonal demand for its mainframe servers.
Rometty now serves as IBM's executive chairman, with Arvind Krishna taking the reins as the company's new CEO.