Episode 5The Gig-Based Economy and the Inevitable Shift in Your Infrastructure
With independent contracting, consulting and gig-based work, more employees are transforming traditional work models. But what does this mean for infrastructures that weren’t built to support them? Hear Insight’s Curt Cornum reveal how businesses can adapt their infrastructure to embrace this modern workplace.
Note: Complete audio transcript found after author info.
Episode 5 - The Gig-Based Economy and the Inevitable Shift in Your Infrastructure
Published November 14, 2016
Announcer: You're listening Technomics. Connecting you to insights on digital transformation and the marketplace, with your hosts: Robyn Itule and Jeremy Nelson. The hosts' opinions are their own. Enjoy the show!
Robyn Itule: Welcome to Technomics, we are in Episode 5 of the workforce enablement season and today's topic is about the gig-based economy and the inevitable shift in your infrastructure. In other words, what kind of scaffolding are you going to need for the people who are probably not going to be around for long?
Jeremy Nelson: I like the scaffolding, you know you think of people who aren't there for long, people working on your house, working on a building, build up scaffolding, and when the gig is over, scaffolding comes down and goes away.
Robyn Itule: Yeah project based too.
Jeremy Nelson: Very much.
Robyn Itule: A while ago I saw a very interesting Intel video and I think it was produced by somebody in their AMEA team and they were talking about how learning and development is going to change because people are no longer going to select jobs, they're going to chose projects where they can apply their expertise or learn and grow their expertise and you know that kind of fundamental shift in how we work is going to have a lot of demands on the IT folks who are making all those things stand up and stay up.
Jeremy Nelson: Absolutely and we even see it here to a certain degree at the services perspective here at Insight. We have very, very busy seasons, but we don't necessarily need to be able to maintain an entire services staff to maintain us through that busy season. So we have plenty of folks who just kind of take ad hoc projects that we contract with to help us though individual needs and then they go off and they work on something else and its a win.
Robyn Itule: Its the same too on the marketing side. We have a tremendous bench of journalists who write for us on a routine basis for a variety of projects and they develop various beats and we have our favorites that we get to work with a lot because the projects always seem to be there for them. And I think that's the interesting hall mark for the way of things to come.
Jeremy Nelson: Absolutely and it even goes back, its obviously at an inflection point at this time where if you go back to the 90s, even in the early .com days, as things were really ramping up, that was a big issue back then was this contract labor. And there were actually law suits around, because at the time one of the primary incentives was around options and things like that. And you had companies like Microsoft that were getting sued by very large staffs of contract laborers who were left out of some of those optionings. And so its obviously been a theme, especially in IT, that's been around for a period of time now but obviously as its matured and we've grown into this consumption based model I think its gone even further in that direction.
Robyn Itule: Well we're going to take a deeper dive on this and when we come back, we will have our guest today, Curt Cornum who is the vice president and chief architect here at Insight. He has so many wonderful opinions and I can't wait to bring him into this conversation.
Jeremy Nelson: Anytime I can get five minutes to talk to Curt, its always exciting.
Robyn Itule: Side note, in addition to being a ridiculously intelligent man, I think he also has adorable schnauzers that he's going to bring to bring your dog to work day.
Jeremy Nelson: Fantastic, and I believe he even made it onto our own Insight Instagram feed.
Robyn Itule: Oh absolutely.
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Robyn Itule: Have you ever had a moonlighting gig Jeremy?
Jeremy Nelson: I have actually.
Robyn Itule: What was it?
Jeremy Nelson: Pulling network cables for an event company. It was awful.
Robyn Itule: Nice. I taught group fitness for about eight years. Most fun job I ever had.
Jeremy Nelson: Mine was a couple weekends, eight years?
Robyn Itule: Yeah.
Jeremy Nelson: That is a huge commitment.
Robyn Itule: So much fun.
Jeremy Nelson: That's like two jobs, that's not moonlighting at that point.
Robyn Itule: No its only one hour at a time, there are OSHA regulations around that. Well gigs are really reshaping what we're doing in terms of the workforce and there's entire economies. I mean, look at Uber and the conversations that have been had about whether or not these people are employees or contractors and that's a lot of grey area that's developing here. And businesses are really sorting out what they should be doing. So to help answer some of those questions, we have one Mr. Curt Cornum, vice president and chief architect at Insight. And also resident futurist, unofficially.
Curt Cornum: Unofficially.
Robyn Itule: Unofficially, officially. So Curt's here today to talk about the gig-based economy with us because its really making a splash.
Curt Cornum: It is?
Robyn Itule: Have you ever had a gig, a side-gig?
Curt Cornum: I don't believe I have.
Robyn Itule: Wow.
Jeremy Nelson: Man.
Robyn Itule: So unmillennial of you.
Robyn Itule: Okay so why do you think the gig economy has grown so much and gained in popularity? Let's call it in the last five years.
Curt Cornum: Well there's a lot of reasons. A lot of folks look to the millennials and they point to the millennials as being a part of that. But I think some of it has just been purely driven by the realities of the economics that are out there. And honesty some people like that situation right? So I think its less of a generational thing and it could be more of an age thing. If you look at folks when they're younger they have less commitment so its easier to have some uncertainty in your paycheck so to speak. And then you have a lot of folks that are actually retiring early but still have a lot to offer to the economy and they have a lot of knowledge so they want to go out and do things on a consulting basis on a gig basis. And so I think you have to have folks at the young end of the scale and the older end of the scale that are both participating in the so called gig or free-lance economy.
Robyn Itule: Yeah, actually my dad, probably four or five year ago, maybe even longer, built his own LLC. He's a physician assistant and went and practiced in some rural areas. Because there are entire businesses that actually support that which you're seeing a lot more of. There are actually infrastructures to help supply those kinds of contractors. Healthcare is just one mechanism. I mentioned Uber as being another. You see a lot of recruiting firms who are really adopting this mentality too but just finding the people is just one area where the infrastructure is spinning up, its sort of a social platform. But what are the other mechanisms that have to be in place within a business to really support an employee base who's more of a contractor?
Curt Cornum: You know, there's a lot of folks that do that today. If you look at financial advisors, a lot of them have independent agents today. If you look at the insurance companies, a lot of them do that as well today. So there's a lot of folks that have been in that model for quite some time. So dealing with contractors really isn't new to them. I think a big part of the difference really is you take, maybe not look at the millennial employee as much as the clients that they're, the customers that they're interacting with. There's been so much change in that area I think its also making real changes to how the workforce needs to adapt to that. And I think if you look at, there's somebody much smarter than me said that one of the strategies is look at what isn't going to change in the next ten years. So when you look at retail and products or the retail space in the next ten years, there's probably three things that aren't going to change. People still want low prices, they still want availability, and they want selection. So those things really aren't going to change. So if you're going to build your business strategy, you look at the things that aren't going to change and I think those are the things that are going to be stable over the next ten years. Now I think when you look at what has changed in the recent past has been that the consumers, the customers are much more tech savvy than they've ever been. And they're much more socially conscious than they've ever been. And both of those two things are really upsetting the way that we interact with customers, the way that we provide customer service to people today.
Jeremy Nelson:That's an interesting one, the socially conscious, you see that kind of as a double-edged sword. Because you have these organizations, like you said, with the advent of social media where they come out and position themselves and they for best intentions try and support social action and things like that, and we've seen those kind of backlash on people. So that's an interesting one to kind of bring up is the implication of kind of modern day retail.
Curt Cornum: Right and the example I use is how many folks like yourself, how many times have you bocked at paying $1.99 for an app, while you're drinking a three dollar cup of coffee? And people do that, and you're like what's the behavior, what's driving that change in behavior that folks would actually bock at paying $1.99 for something and its an interesting thing. And I think the reason is there's been an expectation that's been set that a lot more is free today. There is the freemium economy that we hear about so there's a lot of services that people get today that are free. There's a lot more information out there and that drives that change in behavior of what folks are valuing and what they are willing to pay for these days. And its really upsetting a lot of retailers and its really changing a lot of expectations in the customer base as well.
Robyn Itule: I think its such an interesting point because I was actually thinking about this this morning. I can answer bocking at the $1.99 thing cause here's the deal. You don't really get to demo a lot of those lower threshold apps. Right, so I get in there, I'm looking around, I've spent the $1.99, and I'm like.
Jeremy Nelson:Buyer's remorse on two bucks.
Robyn Itule: This kind of sucks.
Jeremy Nelson:That's pretty hardcore.
Curt Cornum: That's kind of my point, that to your point Jeremy earlier is, you can actually get product reviews on a product that cost $1.99. That's the other phenomenon.
Jeremy Nelson: Extensive reviews.
Robyn Itule: So here's the other flip side to that though and this is where I think that there is a lot of value and I think there is even more change, which is software is a service right? So one of the apps that I am crazy obsessed with right now, is for theSkimm which is phenomenonal news letter, I'm just going to go ahead and plug them. If you're not subscribed to theSkimm, you should totally do it. It will make you a great conversationalist. But they also have a calendar. And the calendar plugs into your own calendar so it has things in there like, "Amazon Prime Day is tomorrow, and today is the.."
Jeremy Nelson: I've got enough emails about that one. I don't think I was going to miss Amazon Prime Day.
Robyn Itule: Don't worry, we're well aware. You're email, direct mail system is on overload right now. But it also tells you things like, "Hey, Wimbeldon is coming up, or its Bastille Day." I'm now just making things up, but I'm pretty sure that's in July. However, but that as a service and there's a monthly charge for that. That ability to keep me posted on what's going on, I find real value in that. And I think that you see a lot of companies, organizations really moving towards that model where its not just one time download, its that ongoing presentation of value.
Curt Cornum: I just, to your point, I think your expectations are higher. Your expectations are pretty high of even something that you're paying less than two dollars for and you really wouldn't have that kind of expectation with something like, you're going to buy a Big Gulp or something like that. You really don't have that kind of expectation, you're surely not going to fill out a review for a Big Gulp, But yet you go online for an app.
Robyn Itule: That's what Yelp is for.
Curt Cornum: You're like, "Well I don't know, it doesn't have four stars, I don't think I'm going to commit to it." So its an interesting psychology that's happening in that space and I think the other part of that is I just believe people's loyalties are much more fragile than they've ever been. Now they may be fiercely loyal, but if something changes in the way that they engage with a company, they will flip their loyalty to a new company and then be fiercely loyal over there. And I think its really upsetting to folks in the retail space as well because of that. Its kind of the double edged sword where they need to be on social media because they need to have a presence out there, but if there's an issue with something that happens in their business, people can pile on and it can really change the way people perceive that business.
Jeremy Nelson: Instantaneously.
Curt Cornum: Even if they've never actually engaged with that business they read something negative about it and they're like, okay I think I'll move on. And so the loyalties that we see out there today are really changing and I think its having a big impact.
Robyn Itule: So we've talked about that in terms of retailers and customer engagement. With the gig-based economy, how do you think that that's going to impact things. Because now we're not talking about your customer base, but you're potential workforce being able to make those moves very quickly and what kind of challenges does that pose for IT.
Curt Cornum: Well there's quite a few because part of it is where do folks work today, where do they want to work, how do they want to engage in a workplace so to speak and some of that's changing quite a bit, the free lancers, the gig economy is changing that quite a bit. But I think in some ways its mirroring the way we all want to engage with our employer today. So I think when you see any employee today, they're acting in some ways much more like a free lancer in terms of their expectations. So that's my view of it. When I walk into the building here, I have a certain expectation that I'm going to be able to use a personal device that I have. In some cases that's actually a policy where we have personally owned phones now that we use, to have corporate information on them. I want to use certain apps that are my preference so that I can get my work done. That really isn't that much different than a free lancer who kind of has those types of freedoms today or those liberties to do that today. And we actually see customers that have a combination of, let's say they have a franchise model and they have a corporate owned model whether its in like financial services is a good example of that. In that financial services model, you could look at that building as being a building full of free lancers right? They're not on the payroll of the parent company and the parent company actually doesn't provide any of the hardware infrastructure down at that brick and mortar building, but they do provide the applications to them. So when you look at that environment, I've actually worked with a customer that wants to take that model of the franchise kind of the free lance building if you want to think about it that way, and they want to move that over to their corporate owned sites because as it turns out, the free lance one is a heck of a lot less work for them in terms of maintenance. They don't have to buy the hardware, they don't have to buy any of that infrastructure, they just need to make sure they can push their applications down to those folks and that they can get connected in a circular way. So obviously security is a big part of this, we haven't really touched on it yet.
Robyn Itule: I believe it was one Liz Lemon who once said, "I'm a contract writer, its like a modern day cowboy."
Jeremy Nelson: Curt this is amazing conversation, we're going to take a quick break and we will continue when we come back with more Technomics.
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Jeremy Nelson: You know what's interesting is that we started off the conversation talking about free lance employment and kind of the gig-based economy and we've kind of brought up a number of different things. And it really all kind of has a very common vein of just consumption. We've talked about freeme [assumed] maps, where you kind of come in and you buy as you need from that application. We've talked about cloud which is all about consumption models. We've talked about free lance employment where its consumption based employment to a certain degree. So it all kind of has this same kind of vein to it of I'm only going to consume what I need, when I need. Whether that's my employer, whether that's infrastructure from a cloud perspective. Whether that's if I want to go buy some coins in an app to make sure that I can unlock Pokeballs in Pokemon Go, not that I know anything about that. But it just..
Robyn Itule: I heard experience there.
Jeremy Nelson: Maybe just a little bit. I am a grown man, I shouldn't be doing that. But it doesn't matter.
Robyn Itule: As long as you don't have like a binder full of like the old coins then we're okay.
Jeremy Nelson: No, no, no, its all good. Its all digital. Wait hold on, but anyway it all kind of ties back to that same just very consumption based where it is more on an individual level.
Curt Cornum: You actually used the term the subscription economy and I think that's what you're referring to Jeremy and its kind of interesting because it started out, some of its not new. I mean we use Netflix, we use other things today. That kind of moved from that consumer base subscription economy that we were pretty used to, to the software is a service that we started to see in the cloud space. And then that moved to infrastructure as a service where that wasn't just a software, but it was some compute and storage that was in the cloud and I did a pay as you go type of model. But what we're seeing now that is really powerful and the most disruptive is going to be what we call, and I'm not the only one that's calling it, its a pretty well described term these days, is technology as a service. And the difference around what technology as a service and you look at infrastructure as a service, software as a service, you could have on premise components. With the first two everything is "in the cloud". When you look at these technology as a service solutions, there is a component of them or components of them that are actually on premise and then there are actually some components that are in the cloud. And what typically happens is they get the minimal footprint that they can have on location, on premise and they move as much of the management and the maintenance and the control to the cloud because its easier for them to do that. And then they provide it as a op-ex model. So it allows people to move from a capitol expenditure model to an operational expenditure model which a lot of companies like because there's some tax implications there and they can pay as you go, pay as you grow type of thing and they don't have to invest ahead of demand. Its a pretty powerful transition that we're seeing in the market today is moving to these technology as a service models. And part of it is the clients, our clients want us to share in the risk. And we do that by providing that as a service. And if they wanted out of it, they could get out of it and guess what, we need to take that on premise hardware back and somebody has to account for that.
Robyn Itule: That's such a great point and that's something that we've done for a long time actually. If you think about our distribution center and the kinds of inventory that we keep on hand in order to be able to store and then distribute to some of our clients who buy a certain IT standard that goes to their workforce, that's one thing. But I'm hearing a lot of buzz about that in the service provider industry. Kind of having that device is a service model build out in addition to their software and infrastructure solutions that they're providing as well because its as you say, they want to be able to cater to their clients with an end to end technology model that can be op-ex.
Curt Cornum: Right and we call it the branch of the future. And if you looked at what I call the foundational technology that's in a future branch or even in some current branches, you've got the wire to wireless network. Of course everybody needs to get connected somehow. You've got the endpoints that you just mentioned, they could be laptops, they could be desktops, they could be other mobile devices. You've got some kind of white area network to get them connected back to corporate headquarters now to the internet, to get to all these SAS offerings that we mentioned. You have some kind of voice and voice mail and that whole call control system. You have the compute and storage that we mentioned. And then you have the security controls that wrap around all of that. If you look at those five foundational technologies, I could go out today if I was starting a small business and I could get all of those as a service today. I could literally get each one of those technologies in an op-ex model and do a pay as you go. So it reduces my risk up front, it makes me a heck of a lot more nimble in terms of getting faster to market. I reduce my ongoing support because a lot of these solutions are handeled by the solution providers. And then when I do need to react to changing technology, I'm not locked into some kind of depreciation schedule of three to five years that I can't get out of and lets my competitors leapfrog me. So this is very powerful to be able to provide that entire technology footprint as a service today and its something that wasn't available honestly a few years ago. But there's today, we could go build that for clients.
Robyn Itule: And let's talk about that depreciation schedule for a moment and the increasingly rapid evolution of technology. I think this has a particular implication with the gig-based economy because, think about who you'd want to work for. One thing that really appeals to the millennials is being able to A, have the choice in their device. And B, have the kind of experience that they would want to secure. So if you're an employer who's on a three to five year depreciation schedule with something that will be proclaimed a brick within the next six months, that is an employment and recruiting risk for you. So being able to have that turnover of devices and having some way to not get leapfrogged or to leapfrog the current trend to get out in front of it and be the next best thing so you can secure the next best talent. And you can grow in that trajectory means a lot in terms of business strategy.
Curt Cornum: Absolutely, I heard of a company that would, when they got the interns in, they were giving the interns hand-me-down laptops. And they realized they weren't getting a lot of the interns they wanted to work for them full-time. And that seemed like the logical thing to do, why am I going to give them the latest greatest. And they actually changed that strategy because it was those interns that really had a much different expectation than folks that had been working there for several years. Folks that had been there kind of knew the policy that was embedded within the culture. The folks that were coming in as interns they had expectations that weren't driven by the current culture. And so they changed that policy to your point, to reduce some of the risk.
Jeremy Nelson:Yeah and I'm not going to lie. I've actually made employment decisions based off of the technology package that was given to me.
Robyn Itule: This does not surprise me.
Jeremy Nelson: Oh well, alright then.
Robyn Itule: Said the man sitting there with the really cool book that he's testing out for IT. You're always on the cutting edge.
Jeremy Nelson:I am, almost bleeding edge.
Robyn Itule: Oh, bleeding edge.
Curt Cornum: You know, one other point that we haven't really talked about that I think is important is, because we did kind of talk about the expectations up front and what's driving value. We talked about this consumption based model, but really that engagement piece whether its the gig-economy or just the current consumer, its really more of a mobile consumer that's driving a lot of this today. And it really is changing the way people engage. Whether the workers are free lancing or not, there's an execration that I want to engage with a company on my terms. And sometimes its going to be self-service, sometimes its going to be high touch. But it always needs to be on my terms. And I think that is really having a huge impact on what we're seeing across our customer base as well. And there's some great examples of that. For example, how many times have you actually talked to an Amazon employee. Have you ever actually talked to an Amazon employee?
Jeremy Nelson: Once, I did a return.
Robyn Itule: No, I never have.
Jeremy Nelson: And this was long time Amazon, this was a while back.
Robyn Itule: I never have. I talked to an Amazon employee because I have a lot of friends in Seattle, but that has nothing to do with purchases or returns.
Jeremy Nelson: You know its interesting though, we're having this conversation but one of the big selling points, I don't know if you remember was the second generation Fire devices was that you could pull somebody up and video chat with Amazon support. But its interesting to hear in this forum that none of us have ever even spoken to am Amazon..
Robyn Itule: No because now they're just using that kind of engagement to feed into some sort of big data source where its just voice activated.
Curt Cornum: That was kind of my point which is, what it means to have a high touch experience is changing. And that could be, that's because they have the right infrastructure in place. They have the right analytics, the information when they need it. They have the applications in the hands of the workforce, whether they're millennials, contractors, free lancers, the gig economy, whatever you'd want to call it. But it really doesn't change the fact that you need those three things. You've got to have the infrastructure to support it. You've got to have the analytics that are helping make real time decisions and real time business. And then of course, you need the application to be able to present that so whoever the workforce is can engage the client the way that they want to be engaged. Its an important part of it.
Robyn Itule: That's really, really interesting. This is good stuff but let's boil it down for our listeners and make it really simple for us. In one line, can you tell me what does a business need to think about for their infrastructure in introducing the gig economy?
Curt Cornum: Well I think what I just mentioned, was that foundational technology. If you don't have the underlying infrastructure, the analytics so that you can react in real time, and understand the relationship you have with your customer and then provide the applications to your end workers that are able to engage them the way that the customers want to be engaged.
Robyn Itule: Awesome, way to sum it up. Alright Curt, we're so thankful that you spent some time with us today to talk about the gig economy and about the infrastructure you need to support it.
Curt Cornum: Its my pleasure.
Robyn Itule: Well speaking of high touch and engaging this conversation has been extremely engaging and I can't wait to continue with the duration of our season and to welcome Curt Cornum back to the conversation inevitably on any topic.
Jeremy Nelson: High rotation, we need to make sure that Mr. Cornum is in high rotation I would say. Thanks for listening to Technomics. If you want to find more episodes you can download the podcasts from iTunes, Google, or your favorite podcast provider. And for more stories on intelligent technology, visit www.insight.com.