COVID-19’s Digital Disruption Shaking Up the Old-World Market

COVID-19’s Digital Disruption Shaking Up the Old-World Market

It’s no secret.

The world is changing before our eyes.

Old-world industries are scrambling to find a way to keep up in this new digital landscape that COVID-19 has ushered in.

However, there are a few sectors leading the way for other companies to follow suit and find success in this new frontier.

Check out this month’s Macro Monday and find out why the following industries are the ones to watch in the new digital world:

  • Online streaming services and traditional media.
  • Telemedicine and restaurant/food services.
  • Remote-workplace tech companies allowing for teleconference communications.

Can you think of other traditional old-line industries that will change to the digital or online world as a result of COVID-19? Let us know at boldprofits@banyanhill.com.

Amber’s Macro Monday – March 2020 Highlights

A lot has changed since my last update.

In this special edition of Macro Monday, we’re going to focus on an industry structured to not only weather but potentially excel during and after this unprecedented COVID-19 outbreak.

And as I wrote in my latest Bold Profits daily article, opportunity beyond the virus — grab 24% growth from America’s move to digital, COVID-19, in all of its virulence, has quickly ushered in a mighty change.

This mighty change was needed for some time.

The change is a mega transformation from the old world to the new world. What we have been calling America 2.0.

And in this instance, I’m referring to the new era of digital transformation.

It’s humbling to think that out of peril such technological changes to society can take form.

First off, I was reading an article from Axios this morning which encapsulates today’s Macro Monday update.

Article quote

We’ve seen these changes in real-time.

If you’re an avid watcher of broadcast or cable news on TV you may have noticed over the last couple of weeks, news anchors and TV analysts are now using Skype, Zoom, Citrix or other digital video software right from their homes to conduct interviews and broadcast their news segments to the world.

Here at Bold Profits we use Zoom to record our webcasts for the past couple of years, that’s how I’m speaking to you right now, so it’s interesting to see traditional news networks embrace this relatively new form of technology to communicate.

This digital change is also now seen in the movie industry.  As in my tweet on March 17 I noted it’s great to see a shift happening as old-world companies learn to adapt.

Photo montage-food delivery & telemedicine

Universal Pictures is now releasing movies in theaters and at home on the same day.  This may become a new precedent for the film industry.

So, my question to you is can you think of other traditional old-line industries that will change to the digital or online world as a result of COVID-19?

Off the top of my head restaurants and grocery stores moving to home delivery no touch services and health care were a typical doctor’s appt can now take place face to face on your smart phone a.k.a. telemedicine comes to mind.

This Crisis Has Accelerated the Need For the Cloud

So, to support this digital movement I’m going to share a recent analysis from Bloomberg Intelligence that shows an industry that’s positioned to boom during and after this unprecedented time.

I’m referring to the cloud market and pure-play cloud providers.

Pure-Play Revenue Growth

Cloud computing is when data is stored over the internet versus physical hard drives. It’s transformed businesses like Netflix, Instagram and Dropbox. Though not directly related to Internet of Things, it will play a big roll in storing data online which influences IoT.

As thousands of workers change gears and work from home, per Bloomberg intelligence data, pure-play cloud providers may see an increase in their top line revenue growth at a 3-yr compound annual growth rate of 27%.

The companies expected to see this growth include infrastructure software cloud companies like Zoom and Slack, even with the potential hindrance of reduced IT spending due to the pandemic.

Per their Bloomberg data Segments such as collaboration software, cloud security and multi-cloud infrastructure stand to benefit from work from-home arrangements, while there will be a long tail for on-premise databases, similar to mainframes. [1]

Moreover content-management suppliers like Box which we also use at Bold Profits everyday may see rising demand from businesses and companies investing in cloud solutions to keep businesses functioning on a high level while workers are remote.

Cloud computing services include these three major categories:

  • “Infrastructure as a service” (IaaS) offers virtual computing infrastructure via the internet.
  • “Software as a service” (SaaS) allows cloud-based software to be available via the internet through a web browser or app, on a monthly or annual subscription basis.
  • “Platform as a service” (PaaS) supports the development and deployment of web applications via the internet.

So, Bloomberg Intelligence has found that, software enabling remote work and related security is a trend that will last beyond Covid-19 and will become part of digital transformation initiatives.

Spending on cloud segments such as infrastructure as a service and platform as a service will accelerate as businesses see the benefit of cloud-based infrastructure in remote work environments.

We believe cloud infrastructure spending will be immune from a likely pullback in overall IT spending through the second half of the year.

In the coming months and year ahead we will see a notable boom in the pure-play cloud market on a large scale.

COVID-19 has accelerated our need for cloud infrastructure and software and what’s most significant is that even once we’ve defeated COVID-19 this industry will become in grained in the digital transformation initiative and will be here to stay.

VISUAL: The Math Behind Social Distancing

Lastly, before I sign-off from this special Covid-19 edition of Macro Monday, I want to share this intriguing infographic from Visual Capitalist, Titled the Math Behind Social Distancing. [2]

They note that Social distancing measures can play a critical role in controlling the spread of pandemics, but only if carried out properly.

This graphic shows how scientist measure the intensity of an infection disease by its reproduction number.

Here are 3 examples of how reducing social exposure limits infection over 30 days.

With no social distancing 1 person can infect 2.5 people within 5 days and then in 30 days 406 people are infected.

Social Distancing Stats #1

With a 50% reduction in social exposure, 1 person infects 1.25 people within 5 days and by day 30 15 people are infected.

Social Distancing Stats #2

With a 75% reduction in social exposure, 1 person infects 0.625 people within 5 days and by day 30 2.5 people are infected.

Social Distancing Stats #3

So, as we practice social distancing together, I sincerely wish that you and yours stay safe and healthy through this COVID-19 outbreak so we can all enjoy these industry investing gains together.

Regards,

Amber Lancaster

Amber Lancaster

Director of Investment Research, Banyan Hill Publishing

Sources:

[1]: Bloomberg

[2]: Visual Capitalist