The slackening of the summer time pace brings an opportunity for reflection. Last August I drew on the story of the impact of the development of the canals in the UK in the late 1700 and early 1800 to make analogies with the impact of the development of cloud computing 200 years on. This year the trigger for my strategic ruminations is a very detailed review in The Economist last month of the Empire of the Geeks - Silicon Valley and what could wreck it.
It focuses on the conflicts increasingly being caused as Silicon Valley ventures crack open established business models and their regulatory frameworks. Think Uber. Consumers "enjoy their taxi-hailing apps, music streaming and voice recognition software". But will attitudes shift as consumers better understand the degree to which the Valley "dominates markets, sucks out the value contained in personal data, and erects business models that make money partly by avoiding paying taxes". The review recognises that there is a rapid development of competition to Silicon Valley (read my April column on The Flat White Economy) but details just how increasingly disruptive the Valley is in business terms.
The last half of the last decade saw the development in the Valley of the prime elements of the cloud-based services business model – the emergence of Amazon Web Services, of Salesforce's CRM offer, of Google's search engine. I started writing these articles in April 2008, in time to observe and comment on this new world as it took shape.
The next half decade, from 2010 until now, has seen the emergence of platforms (IaaS and PaaS, such as AWS, Microsoft's Azure, and so on) enabling in their turn a fast developing diversity of more specialised services (SaaS) and apps. And an accelerating shift from the fixed desktop to the mobile smartphone and tablet – fed by, and feeding in turn, the world of the app.
And, transitioning into the new half decade up to 2020, Ofcom research confirmed that, in the UK, "Smartphones are now preferred to laptops for going online". A key tipping point!
Over the last half decade the enterprise that moves with the times has increasingly reached into the cloud to overhaul, transform specific aspects of its operations. Web capabilities migrated on to cloud compute platforms. Specific back-office and front-office services now sourced as cloud-based services. Emergence of the hybrid compute model that integrates in-house operations with externally sourced computing power. (The annual surveys published since 2010 by the Cloud Industry Forum – which I chair – charts these developments.)
And we have seen an accelerating trend for particular enterprise business models to be more radically transformed. Think of the world of publishing, of retail. And in ways not easily forseen. Thus Millennial females' anxieties about appearing too many times in the same outfit in their online photos are changing shopping habits, the Financial Times reported last month.
My summer reflections on the next half decade to 2020 is that the enterprise that moves with the times now has to go back to the fundamentals of what its business is and challenge accepted wisdoms. It will no longer be sufficient to transform one or two specific apsects of its operations - it is more likely that the need is to revisit the essentials of what its business is, and what the basis of its competitive survival now is. More than likely it will have to rethink its business anew.
My July column The cloud is driving innovation galore! hinted at the now wide range of building blocks and tools available with which to rapidly create new business models (this is, after all, how the fast growing start up drives itself):
- Underlying integrated data computing/networking platforms to provide the foundations. These platforms increasingly underwrite with strength - delivering cybersecurity, data privacy and regulatory compliance, business continuity - and effortlessly interfacing with & managing the world of smartphone-based mobility.
- An ever growing universe of specialised cloud-sourced services and cloud-serviced apps with which to build and elaborate the business.
- New capabilities with which to rapidly create specialised services and apps that align closely to delivering key business objectives.
- And new capabilities with which to rework and migrate the older legacy digital 'fabric' where required & justified.
I introduced the term paranoid optimism, borrowed from the retiring Editor of the Economist, in February as a vital Board culture in today's world. Paranoia because, unless you, as CIO, help your colleagues revisit what the fundamentals of your business are in this new world, and then act accordingly, someone else surely will. And optimism because the full range of building blocks, tools and capabilities now available with which to rapidly recreate your business anew are now impressive. You can act with confidence!