Over the last few months, businesses in all industries have had to overhaul their way of working, their business models, and their operating strategies. People Matters had a conversation with Tim Wong, the Chief Revenue Officer of messaging middleware firm Solace, on where his company's strategy is going during this period of disruption. Here are the highlights of what he shared.

What's the effect of COVID-19 been on your business so far?

It was a very difficult second-half environment. As you know, the pandemic hit Asia in late December to January, and then the rest of the world from February onwards. Our fourth quarter, the February-April quarter, would usually be the busiest part of our year. Instead, clients were deciding to divert projects for funding reasons.

But we saw a significant improvement on our recurring revenues, over 25 percent on an annualized basis. Our software and cloud subscription have become very popular deployment options among our clients—our software subscriptions improved 200 percent, and we had a seven-fold improvement in cloud adoption.

More than business results, I want to reflect that our first priority was the health and well-being of our global employees. People matter the most, and we moved to a work-from-home environment on a global basis beginning in March. This was associated with a significant amount of disruption. When you're a technology company like ours, the way we interact with clients is typically in face-to-face meetings and workshops, and shifting to Zoom meetings really does change the nature of the engagement.

Would you consider that disruption more of a challenge, or an opportunity?

We've seen a significant increase in the quality of technical discussions and engagements. These have been very substantive. Some of it might be that being at home, with fewer disruptions, we're not being forced to prioritize among the other things that might come up in an office enviroment.

We also started to shift to an approach that's very strong on digital engagement. If I consider the last financial year, something lik 25 percent of our global marketing spend would have been spent on digital marketing programs. Over the next 12 months, we see that 25 percent will look more like 60 percent—we'll be significantly reallocating spend towards the channels that are the most material for us.

And if you think about what's happening with clients, probably two to three years of digital transformation took place in the last two to three months. Just looking at the example of our own marketing spend, we've moved away from face-to-face events, hospitality, and trade shows, to generate new demand and new opportunity in a digital environment.

What's your perspective on digital enterprise transformation?

Transformation is around turning a non-real-time enterprise into a real-time, event-driven enterprise where consumers and businesses understand precisely where they are at any one time.

At the same time, it's around understanding that at this time, many companies will be paring back their technology budget to only focus on productivity and cost centers. Whether it's the aviation industry, or oil & gas, or others, these businesses are significantly pinched at the moment. So it's very important to understand what the needs are in each of the different industries. Resilience has to do with broadening the customer base, so that we are not dependent on a single industry and can pivot into new industries which we expect are going to grow faster. That can be done on a regional basis also, as some regions are going to come out of this faster than others.

On the topic of the recovery, what's your strategy going forward?

I think it's going to be absolutely critical that businesses preserve their existing long-standing client and customer relationships. Next to employee health and well-being, that's the next most important thing we have to be doing: continuing to make sure that they can be successful, grow and digitally transform quickly, providing them with technology options and pricing that supports the new norm. That's where we went, from selling hardware that you would pay for up front, to selling the service as a subscription so that what was formerly a capital expense to an operating expense. In today's environment, capital preservation is absolutely critical. I think that helps account for why we saw such an increase in subscriptions in our business.

The other thing that I think all businesses are doing today—and we're certainly no different—is being very focused on cash preservation and keeping a close eye on cash flow. It goes without saying that cash is king right now. We've come up with some strategies to help generate cash ourselves. For instance, our subscription cycle is typically annual, but for some large strategic clients, we have offered them a pre-paid subscription of several years in advance which actually gives them better returns than some standing interest rates. It benefits us, because we're able to lock in cash, and it benefits them, because they can lock in savings.

Large or small, I believe that every business needs to stress-test their business model and really lean in with respect to scenario planning. In doing that, you're able to be decisive about the actions you're taking, and use your values, your culture, your entire system within the company to drive decision making.

Finally, what are your thoughts on the "new normal" for face-to-face relationships versus digital engagements?

I think the "new normal" is going to be a combination of face to face interactions and digital engagements. Face to face relationships will continue to be a requirement, particularly at senior levels. If you want to have an executive-to-executive encounter, those things, especially for a first meeting, are best done in person. Can it be done over a Zoom call? Yes—but it is more difficult.

I do think that we will start shaping more paths that require more thoughtfulness around the key elements of an interaction, so that they can be delivered digitally and with relationships and face-to-face interaction as a supporting element, rather than the other way around as it is currently.

If you ask any traditional IT vendor, they'll tell you that relationships are king everywhere in the world. There are all sorts of customs and traditions that have grown up around these client engagement interactions, like the after-hours drinking sessions in Japan or Korea or China. I do think that once we get back to normal, some things are going to be business as usual. But what we have to focus on, is making those precious encounters more effective.