So much for those post-Labor Day return-to-the-office plans. Apparently all the NPIs and jabs aren’t enough to placate employees and corporate executives in the face of new SARS variants and the comfort of working at home, putting office openings on indefinite hold.

This weekend’s Wall Street Journal headline sums up the zeitgeist:  Remote Work May Now Last for Two Years, Worrying Some Bosses. It points out an aspect of human nature familiar to anyone trying to break a bad habit: the longer you’ve been doing something, the harder it is to change. The Journal highlights how executives are concerned (emphasis added):

that the longer people stay at home, the harder or more disruptive it could be to eventually bring them back. Many employees developed new routines during the pandemic, swapping commuting for exercise or blocking hours for uninterrupted work. Even staffers who once bristled at doing their jobs outside of an office have come to embrace the flexibility and productivity of at-home life over the past 18 months, many say. Surveys have shown that enthusiasm for remote work has only increased as the pandemic has stretched on.

Despite polling showing that 60% of people working remotely would be comfortable returning to the office, companies have turned cautious in the wake of increased Covid activity and an 18-month track record of successful remote work. Indeed, the same poll shows that more than 80% of employees enjoy working remotely, a level that has been remarkably consistent for nearly a year.

The cascade of companies dropping office return dates is daunting: Apple, Amazon, Chevron, Facebook, Prudential, Wells Fargo, Lyft. Mobility statistics show that activity around offices is about half its pre-pandemic level, while Bloomberg reports that in New York, “average monthly ridership on the subway in July was about 49% below the pre-pandemic baseline.” Meanwhile, in San Francisco, only 19% of office workers are back and the amount of office space available for lease is four-and-a-half times the level of two years ago.

Videoconferencing is here to stay

Remote-hybrid work means that like email, videoconferencing is now a permanent part of the work environment. Indeed, as remote work engulfs a second year of graduates, it establishes a new set of norms that most organizations will have difficulty changing. As another Journal story puts it, To Gen Zers Working From  Home, the Office Is a Remote Concept. Those raised with IMs, Snapchat, FaceTime and Zoom school might regret not having some in-person mentorship, however, they don’t see it as the same handicap as their elders reared under a different set of employment mores. Indeed, after a lengthy period of remote work, many employees feel like they don’t need face-to-face supervision at all.

Consequently, options for remote video participation will be expected for every business meeting, corporate event or conference. Although mega-events like CES, known as a place for gadget manufacturers to make business contacts, might try and field a live event next year, many (most?) former attendees will likely decide that the marginal benefits of in-person attendance aren’t worth the associated logistical hassles. Indeed, some researchers advise continuing to use video meetings even when most employees are back in the office.

No matter when the doors of corporate offices swing open, the reality is that most organizations will have a hybrid workforce where, on any particular day, a significant share of employees are remote. That means tools like Zoom, Meet and Teams aren’t just here to stay, but will pervade every business process that previously required face-to-face interaction.

A tripartite oligopoly

No matter how you measure it, the market for video conferencing is sizable and growing. One estimate puts aggregate video conferencing revenue at about $4.7 billion this year and with a 11.4 percent CAGR through 2028, reaching about $10 billion. Another has the market growing somewhat slower, at 9.7% annually, but hitting about $11 billion by 2027. The market is dominated by Zoom, Google and Microsoft, with one estimate derived from search volume concluding that the three products account for 85% of video call volume. Add Cisco WebEx and LogMeIn (GoToMeeting) to the mix and you have Gartner’s top picks for enterprise online communications and collaboration.

Investors never wavered on market-leading Zoom’s prosperous future in a post-pandemic, hybrid office world with its stock trading within a 20% range of the mid-300s since late last year, quadruple its pre-pandemic level. Google and Microsoft are far too large for their respective videoconference products to meaningfully affect their revenue, however, both see the category as strategically important, making significant investments in the platforms over the past year. Thus, we have reached a tripartite videoconferencing oligopoly that will be impossible for other companies to meaningfully penetrate.

From transient meetings to persistent collaboration

The trick for conferencing software developers has been adapting products designed for short, one-on-one or small-group meetings into virtual replacements for office conference rooms, project team workrooms and mass events. As I wrote last February, virtual event software is a specialized category with needs that general-purpose products focused on the hybrid workplace can’t satisfy. However, with remote employees now a permanent part of the work world, video conferencing products must evolve beyond real-time meetings into a virtual umbrella for all forms of in-office communication. Here, Microsoft and Google have the advantage of incorporating video conferencing into existing productivity and messaging suites since they provide both real-time and asynchronous communications.

The need to support a full range of communication modalities is critical for hybrid organizations, particularly those with workgroups spanning several time zones and geographies. Prithwiraj (Raj) Choudhury, Associate Professor at the Harvard Business School, described the needs of remote organizations in an influential article last year. In Our Work-from-Anywhere Future, Choudhury wrote that (emphasis added):

WFA [work from anywhere] organizations must therefore get comfortable with asynchronous communication, whether through a Slack channel, a customized intracompany portal, or even a shared Google document in which geographically distributed team members write their questions and comments and trust that other team members in distant time zones will respond at the first opportunity. One benefit to this approach is that employees are more likely to share early-stage ideas, plans, and documents and to welcome early feedback; the pressure to present polished work is less than it would be in more formal, synchronous team meetings. GitLab calls this process blameless problem-solving.

In contrast, Zoom’s intention to acquire Five9 indicates that it sees little point in attacking a fortified hill where Microsoft, Google and Salesforce (Slack) dominate the market for productivity and collaboration services. Instead, Zoom finds more opportunities in vertically expanding into omnichannel customer support for organizations still struggling to serve users and employees in an online-first world. As Zoom CEO Eric Yuan said in announcing the acquisition,:

Enterprises communicate with their customers primarily through the contact center, and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers.

Zoom expanded its SDK and introduced Zoom Apps which allow developers to extend the Zoom platform with new features. It also added OnZoom, which as my colleague Phil Wainewright wrote last fall, “build[s] on Zoom's appeal to personal trainers, performers and educators among others [and] gives businesses and individuals the ability to host and promote paid video sessions and events on Zoom.”

My take

For most office workers, the days of a long commute, punctuated by a stop for drive-through coffee, then schlepping a backpack or briefcases across a parking lot before unpacking and starting the work routine are mostly, if not entirely over. As Intel CEO Pat Gelsinger put it to the WSJ:

If you have a little blip, people go back to the old way. Well, this ain't a blip.

What started as a stopgap in a locked-down world — using tools designed for impromptu, ad hoc conversations as a stand-in for face-to-face business meetings — has, and will continue to evolve into a rich form of communication for the work-from-anywhere organization. What we lose in the form of the subtle cues of body language, we gain in the ability to break the shackles of time and space via videoconference and collaboration technology. We will soon have a generation of employees that will see the unavailability of such tools as inconceivable as life before mobile phones.