The great transition

  • Tweet
  • Share on LinkedIn
  • Share via email
  • Print
  • Download

June 21, 2021


Much of the workforce is going back to the office for the first time in over a year. As companies around the world implement a hybrid work model, enhanced technology could be key to facilitate the transition, according to George Saffaye, BNY Mellon Investment Management global investment strategist.

Hybrid return-to-work models will spell yet another major change for corporations. While the seismic shift to remote work instituted throughout the COVID-19 pandemic proved to be difficult for some, technology such as video conferencing software and apps that enable collaboration helped buoy business communication. Certain technologies will likely be vital for the transition back as well, or at least halfway back.

A recent Microsoft study, which surveyed 30,000 people in 31 countries, found that 66% of business executives are considering redesigning office space to accommodate a hybrid work environment.1 The “hybrid model” would require some employees to be in the office full time, while others solely work remotely, and a third segment would go in less than five days a week.

The overall functionality of hybrid work will likely require a stronger technological infrastructure, according to Saffaye. In fact, similar to how “pandemic stocks” performed well during lockdowns, he believes some areas of the tech industry may stand to benefit from the soon-to-be ubiquitous model.

“Anecdotal evidence supports that office and employee connectivity will need to be more robust to facilitate increased collaboration under a hybrid work design.” Saffaye says. “We expect these conditions could lead to a broad and robust cycle for information technology (IT) hardware and networking equipment.”

IT hardware consists of essential computing components such as hard drives, RAM, and motherboards, as well as accessories like keyboards and printers. Some companies are planning to instate hoteling, or shared workspaces, where different employees would share the same desk and computer on alternating schedules. This will likely require greater investment in hardware, partially because companies will need to sanitize equipment like computer mice and keyboards more frequently, calling for more backups.3

“We also see networking equipment opportunities where cyclical upgrades may play out,” Saffaye says.

A 2020 study by Swedish enterprise software company IFS, which surveyed over 3,000 executives from six regions across the world, found that 70% of businesses planned to increase or maintain spending on information technology (IT) after the pandemic.4 As for individuals, there is expected to be a growing demand for portable devices. Business advisory firm Gartner forecasts that the number of laptops and tablets in use will increase 8.8% and 11%, respectively, in 2021.5 Anecdotally, this is also a contributing factor regarding the demand for semiconductors, according to Saffaye.

“Semiconductors are at the heart of all technology, where they provide the processing capabilities to work faster, more capably and take advantage of more powerful software,” he says.

But what’s good for hardware is also good for software. As a result, technology like cybersecurity solutions, programing interfaces and video conferencing software should see increased spending, according to Saffaye. In particular, data breaches have become more prevalent throughout the pandemic due in part to widely distributed workforces.

“We believe this new threat vector is providing tailwinds for many forms of security: cloud application security brokers, secure-web gateways, vulnerability management, end-point detection and remediation, two-factor authentication, firewalls-as-a-service and API security gateways,” says Rob Zeuthen, senior portfolio manager of the BNY Mellon Small Mid-Cap Growth Strategy.

“We see prospects for robust growth in cybersecurity-related technologies and networks that can authenticate and protect both edge devices and the burgeoning digital economy.”

With an expected influx of more hardware to accommodate hoteling, as well as a remaining portion of workers who will continue to work from home, organizations will need to continue to invest in cybersecurity solutions. This is reflected in recent forecasts, as the cybersecurity industry is expected to grow at a compound annual growth rate (CAGR) of 12% over the next eight years, from US$165.8 billion in 2021 to US$366.1 billion in 2028, according to market research firm Fortune Business Insights.7

Additionally, video conferencing should continue to play a dominant role in day-to-day operations. “The sustained role of video, which has permanently replaced a portion of corporate travel, also requires more robust networking infrastructure,” Saffaye says.

A recent study by market research firm MarketsandMarkets projects the global video conferencing market will undergo a CAGR of 19.7%, from US$9.2bn in 2021 to US$22.5bn in 2026.8 Corporate use should continue to drive growth, as the hybrid model will still require in-office workers to communicate with their remote counterparts.

According to Saffaye, some of the tailwinds that occurred during lockdowns will continue to propel both hardware and software. He adds, “We also see potential opportunities as Biden’s infrastructure proposal could be more impactful to end markets typically leveraged to private non-residential spending.”

If US President Biden’s infrastructure plan allocates money to corporations, they could possibly use it to build a more robust digital infrastructure; especially if the shift from traditional operations results in environmental benefits like reduced paper consumption and less waste. Increased reliance on digital operations would also reduce the emissions created by corporate travel.9 And if creating a more sustainable environment is a shared priority between corporations and governments alike, it is fair to assume digitization will continue to be a long-term theme.

1 Microsoft: The next great disruption is hybrid work—are we ready? March 22, 2021.

2 C suite refers to executive-level managers withing a company.

3 Computer World: How IT must adapt to the emerging hybrid workplace. January 11, 2021.

4 IFS: 70 percent of businesses increase or maintain IT project spend post-pandemic. Accessed June 2021.

5 TechRepublic: More laptops and tablets, fewer desktops… April 1. 2021.

6 The Internet Crime Complaint Center (IC3) provides the public with a reliable and convenient reporting mechanism to submit information to the FBI concerning suspected Internet-facilitated criminal activity and to develop alliances with law enforcement and industry partners.

7 Fortune Business Insights: Cyber Security Market Size. March 2021.

8 WBOC: Video conferencing market growing at a CAGR 19.7%. June 4, 2021.

9 Forbes: Digitization drives opportunities and challenges for transformation. June 4, 2021


All investments involve some level of risk, including loss of principal. Certain investments have specific or unique risks. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Digital assets can be volatile and subject to fluctuations in value.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others.

This material has been provided for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement, and should not serve as a primary basis for investment decisions. Prospective investors should consult a legal, tax or financial professional in order to determine whether any investment product, strategy or service is appropriate for their particular circumstances. Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. This information contains projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or expectations will be achieved, and actual results may be significantly different from that shown here. The information is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

© 2021 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York NY, 10286

Not FDIC-Insured | No Bank Guarantee | May Lose Value