The search for digital reinvention

Posted by Mike Walsh

2/23/17 12:07 AM

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For many companies the Cloud has changed the way they use software. For a fortunate few, it has completely changed the way they do business.

In the last quarter of 2016, Amazon made $3.53 billion in revenue from its Cloud business, up 47 percent from the same time last year. That division now accounts for more than 71 percent of Amazon’s $1.3 billion in operating income, confirming what was long suspected: retail and logistics may be just a sideshow compared to the profit potential of digital infrastructure. That was not always the case.

I remember the Internet as a kid. I was an early enthusiast: accessing bulletin boards with an acoustic coupler modem so slow that it loaded pictures one line of pixels at a time. From that perspective, it was inconceivable that one day we would be using the same infrastructure to stream high definition entertainment. Stranger still, that it would be the platform that ran the world.

It is easy to forget how quickly things have changed. Fast forward past AOL's startup disks, Netscape's list of cool web links and MySpace - we rapidly reached a point when we stopped thinking about the Internet as pipes, routers, and computer servers – and instead as a collection of digital services.

The Internet today is really an operating system, that powers a relatively small number of master platforms that in turn run much of the world’s applications, from performing complex calculations on demand to providing storage for both our personal and enterprise content.

All of that adds up to one thing: what it meant to be digital ten years ago, means something very different today.

If it was once enough to ensure that your business could be found online, now the real question is whether your business has been designed to be digital from the ground up.

Consider sales as an example.

In the old days, big enterprise software companies hired account executives to take prospects out to lunch, golf and even on vacation - to try and win big sales orders. Now, with self-service and subscription models, software companies won't even call you until you reach a certain number of active users. And even then, you probably won't get that free lunch.

Amazon may be the classic example of a company that constantly transforms itself, but it is not the only one.

John Deere is no longer just a tractor company, its predictive maintenance models means that it is also a company that sells data about tractors. Rolls Royce doesn't sell jet engines, it uses digital technology and sensors, to sell performance and uptime. Even Netflix, the wunderkind of 21st century entertainment, is a company in a state of constant reinvention. Not so long ago, after all, they made their money sending out DVDs in little red envelopes.

For leaders, the real priority when it comes to technology, is figuring out what is strategic and what is generic.

Generic technology is no more a source of advantage than running water or electricity – it is a utility. Being strategic means leveraging technology to design new experiences for customers and partners, as well as pushing the boundaries of how employees work, communicate and collaborate.

Even this late in the game, it is still not too late to reimagine how you do things. Digital reinvention, after all, is not something that great companies ever stop searching for. 

Topics: Innovation

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