I’ve always thought like a futurist. Which leads me to make some pretty bold assertions about technology, and its impending impact in our lives. Much of this stems from a career in technology, across 4 continents and 3 decades. Foreseeing the impact of the Internet when you led inititatives like automatic, remote, backup services before the web in the ’90’s, or the impact of Cloud, after building one of the world’s first Application Services Provider in 2000, becomes automatic.
But there are plenty of technology initiatives, many of which have failed to take precedence, like 3D TV’s and WAP. Others that succeeded beyond anyone’s imagination, like SMS texting.
How Did Texting Go Viral?
Remember when you had to learn a new language because you only had 160 characters and a numberpad to send a text. When you could only text people on the same phone network, in the same country. And then when you had to pay more to send across networks.
How is it that financially strapped young people could suddenly afford inordinate amounts to buy a mobile phone, and deal with this cumbersome technology?
Here’s one of the keys I use to evaluate nascent technology. Maslow’s Hierarchy of Needs. Particularly the need for self-expression, connection.
I first learned the power of this when I was in the Air Force. We would be back from an exercise, exhausted and starving, in the meal queue, when mail arrived. To a man, anyone would leave sacrifice their place in line to get a letter from home.
Information and Communication Technology
This primal need drove language, writing, the printing press, the telegraph, and broadcast media like the radio and TV. It is the key to the rise of Mobile Phones (despite unwieldy SMS), to the Internet, to Smartphones, to YouTube, to Social Media. This is what drives Wearable Tech, IoT, Augmented and Virtual Reality.
3D adds no connection over and above television, whereas SMS enables people to connect in a way unprecedented in history.
If you want to determine whether a technology will take off, pay heed to Maslow.
The other day, at a meeting with industry representatives driving innovation, and STEM education, one of the members said: “Let's face it, the big end of town cannot innovate. All innovation today comes from start-ups and small agile businesses.”
What do you think about that? Are large companies doomed to a life of BAU at best, and bankruptcy at worst?
It seems the zeitgeist around innovation, especially in Australia, is very skewed towards start-ups. To be innovative you need to use 'Agile Methodologies,' be a student of 'The Lean Startup,' and whatever you do have a 'hackathon.'
Whilst it is true that current technologies, from SMAC to IoT and others are removing barriers to competition. There is a race condition between large organisations' ability to restructure themselves around agility, and start-ups achieving the scale they need to disrupt marketplaces. It is not true that start-ups, far less small business, hold the brains trust on innovative creativity.
Try a quick thought experiment: Time yourself, and in 2 minutes write down the names of the top 9 innovative companies you know…
Chances are names such as Apple, Samsung, Google, Microsoft, Facebook, Amazon, perhaps Intel, maybe even CBA will be on the page. Yep, you may have just listed the largest companies rather than the smallest. And yes, I know that some of them we still consider as startups. Of course they were all startups at one stage. However, for most of them their most recent innovations were as large corporates.
So what's going on here?
Why do we consider large companies as the most innovative, yet hold to the belief that large companies cannot innovate?
I observe 5 areas of overlap with these organisations
1. Strategic Innovation
All of the most innovative companies, almost by definition, have a strategic intent to innovate. For the most innovative, this is pervasive.
There are three waves of innovation:
Wave One – New products and services in the next 12 – 18 months.
This is the area most start-ups work in. Many companies struggle to bring new products to market within this timeframe because of Corporate Antibodies. Even Microsoft used to operate on a 3 year upgrade cycle. Not anymore.
Wave Two – Innovations for the next 18 months to 5 years.
This takes more investment and far more risk, especially with the increased rate of technology change. The increased risk also increases the rate of failure. Nevertheless innovative leaders have a roadmap that drives innovation through this time horizon.
Wave Three – Innovations for the next 5 to 20+ years.
Only the richest organisations can fund 'Blue sky' research projects of this nature. Many innovative companies: Pharmaceuticals, Oil & Gas Exploration, Travel & Transport, operate almost solely in this area. Start-ups that capitalise here often emerge from long-term government funded research.
All of the innovative enterprises have a strategy that invests in all three waves. Actually all the leading national economies employ strateges that facilitate innovation through all three waves.
2. Moore's Law
These companies are all architected around digital technology.
IT is no longer considered a support layer driving cost efficiencies like productivity, but the company exists almost entirely because of IT. Put another way, IT increasingly, or solely, drives revenue generation and development of new products and services.
This is risky because as mentioned above, digital is a great leveller. The diseconomies of scale can easily outweigh the economies. This means these organisations continually need to transform cost structures and operations to benefit.
3. Metcalfe's Law
These companies all benefit from the exponential power of network effects.
Whether B2C, B2B, or B2E, they harnessed the power of the Internet, and more recently Social Media to accelerate their reach. This is probably why most of the companies that come to mind are consumer brands. Partly this is because of the network effect brand awareness has, but when you consider companies like Apple, Google, and Samsung, they recognised that “the exponential power of the (networked) consumer is far greater than the enterprise.”
Many of these organisations are already considering the IoT as we move from Systems of Engagement to Systems of Insight.
All of the companies above now provide platforms for others. They have transformed from a vendor of products and services to a platform for others to build their businesses upon.
Apple doesn't just sell iPhones, but provides the most lucrative platform for software developers, musicians, authors and together with IBM, soon businesses.
Microsoft has been doing this, in enterprise, for years.
5. Business Model Innovation
Not only have the leaders in innovation developed world changing products and services, but they have innovated entirely new business models. Both internally, and for their customers.
Amazon has entirely changed the way that businesses can sell, warehouse, and distribute products. With AWS they've entirely changed procurement and budget cycles.
The Upside Down Bell Curve
It turns out that both competing viewpoints, viz. the most innovative companies are also large enterprises, and large companies struggle to innovate like start-ups, are not mutually exclusive. Rather there is an inverted bell curve. The most innovative companies are at both ends of the scale spectrum, with a large number of organisations in the middle.
The question then becomes, what is your organisations strategic approach to innovation, and how can you improve this to succeed in the digital economy?
I have a friend, let's call him Xavior, who recently lost his laptop bag in a car break-in. In the bag was his laptop, with all of his photo's of his young family. All of the photos. They're all digital, and all stored on the laptop. And there were no other computers with these photos.
Yes there was a backup, in case the laptop failed. This was stored on an external USB Hard Drive, that unfortunately was in the same laptop bag.
You can imagine how crushed Xavior is. Tragic. As he put it, “This is not about replacing the stolen laptop. I hope the thief is happy with all of our only memories of our children.”
Which leads me to ask (philosophically), “It's 2016, why isn't there a back-up in the cloud?”
To which the most common answer is: “The 'free' accounts aren't big enough for all my data, and I can't afford a premium account.”
Of course there are other answers, e.g. “I don't trust my personal photos on a Public Cloud Provider that could be hacked.”
So here's a couple of questions:
1. How much would you pay to retrieve your data?
Let's say you couldn't access your photos because of a computer failure, or a corrupted SD card. How much would you be willing to pay to retrieve the information? Chances are, if these were your only memories, this would be a very high figure.
More than you would pay for backup sw.
In fact, quite apart from synchronised drive providers (Box, Dropbox, OneDrive, GoogleDrive) that have a freemium account model, you can get CrashPlan from Code42. For Free. This will automatically back up all the files on your PC or Mac (or Linux box) daily. If you want you can attach a HDD to your computer, do a full backup. Then plug this HDD in a friends computer on the other side of the Internet, and your files will autormatically backup to this drive. Daily. For Free.
If you want to add continuous backup, plus unlimited cloud storage, plus mobile phone access, this will cost you a whopping $5 per month.
So I ask again, how much are the thousands of photos worth? $60? I'd say so.
2. What is More Secure?
What is more secure? Duplicate copies in a public cloud provider that could potentially be hacked? Or, all of your valuable information on a physical machine?
With regard to hacking: It is extremely unlikely that anyone is going to hack you. Period. Unless you're a celebrity that has saved naked photos. Are you? Have you?
I thought not.
But even then, your HDD crashing, or your laptop failing, or your car being broken into? Those are far more likely events.
Actually if I was to glean valuable information from you (which doesn't include your photos) I would hack your home computer a long time before hacking a Public Cloud Provider.
Seriously, the cloud is more secure than your PC at home.
3. Why Do We Think Everything Should Be Free?
This is my big question for today. For some reason there seems to be a “everything should be free” culture.
I'm willing to create a personal website of all my photos and videos and thoughts and events, but I'm not willing to pay for this website.
I'm willing to download apps or songs or movies as long as they're free.
I think it's ok to synch my files on a cloud service for free as long as I don't have to pay anything.
You Always Pay
As Xavior found out, you always pay for security. Either before disaster strikes, or afterwards. Afterwards is always more expensive.
This is true for other 'free' services. We actually pay far more for them than a financial sum. Our attention (time) is far more valuable than the $10 per month it would cost to host your own website. Your email address is far more valuable to a marketer over time, than the $100 for a 'free' report.
Put in place a process to automatically backup your important files. Pay for a Dropbox subscription (that boosts you from 2GB to 2TB), so everything is just synchronised, securely.
Or a MS OneDrive, or a Google Drive, or S3 on Amazon Web Services
Or Crashplan. Which, again, you can implement for a daily, remote, automatic backup for free!!
And the next time you sign up for a 'free' account, take a moment to figure out just what you're actually paying.
I suspect for Xavior all is probably not entirely lost. There'll be photos posted to Facebook, and Twitter. No doubt some were emailed to family and friends. Then there's photos others took that will be both online, and offline on home computers. Perhaps even some left on the Camera.
I rather suspect there won't be anywhere near as many photos, but it probably won't matter. The curated collection will be just as valuable. Consider this an unplanned editing event. Based on the premise that all the best shots where shared already.
The other day I went to a popular local (Aussie) fast food place and ordered a burger with a drink. Only to find it was cheaper to buy the “meal deal” that included fries as well. Which I did. Then threw the fries away.
I hate that. Don’t you?
Don’t you hate knowing that you’re paying for something that you don’t, or won’t, use. This is also the way that Enterprise Licensing Agreements work. Which probably accounts for the dissatisfaction CIO’s have with their ISV’s, and in some part at least, is driving people to the cloud.
Yet the cloud is currently no better for enterprises. Either you procure Infrastructure as a Service, which leaves you with 2 options:
Your ISV allows you to port your licences to the cloud vendor
Your ISV empowers the cloud vendor with a Service Provider (rental) licence
If your ISV does neither, then your only choices are to maintain the legacy environment, outsource, or replace the application. All of those leave you with the “paying for the redundant fries” syndrome.
Or you opt for Software as a Service.
For an enterprise the cost/benefit of the transition program doesn’t always make (financial) sense. By which I mean there may be other Balanced scorecard metrics: Efficiency, Time to Market/Agility, Customer Satisfaction, or Productivity, that may make sense. But financially you could potentially save 25% on operational costs, yet need 30% over the life of the application, to transition onto the service.
At least you can have just the burger though, for just the number of users you want at the time, without having to pay for the fries.
Is there an opportunity now, with the advent of SaaS providers, for you to revisit your ISV’s and have the conversation about reducing licence terms for software you won’t deploy?
When you look to your IT strategy for 2013 and beyond, what are you paying for that you’re not using?