I want to dive a little deeper into the context of it all, as essentially everything is changing significantly, all at the same time. There are competitive and business transformational impacts that the CEO must pay attention to as time to market and cost of experimentation fall amazingly.(This is part two in a series written by Evergreen CEO Don Casson. You may read part one here. If you are interested in reading it all at once, follow this link now to the whole document, "The Big Lever.")
What is Happening?
Tomorrow is here. We all know that hundreds of millions are equipped with powerful mobile devices that know where they are, what they are interacting with and what they might want to do. In six short years, App Store have lit the fuse on creation of hundreds of thousands of applications and thousands of new companies. It is an explosion of creativity.
A massive transformation is happening in enterprise IT as the client/server paradigm gives way to the future – mobile, social, cloud and big data – or what IDC calls "the Third Platform of Computing." Enterprise IT solutions is one of the hottest venture-based marketplaces now, as thousands of companies are leveraging the fresh platforms of the Third Platform to uninvent the traditional providers. The power of these new platforms is such that even traditional thinking of software, service and support is upended, as "Anything as a Service" blurs the lines and allows the "product" to be defined by the marketplace rather than the technology constraints.
A similar transformation is happening in application development, with a tidal wave of Open Source coming. Consider GitHub, the open source development community. Started in 2009, more than three million developers pay to share work in the community, with 60,000 more joining each month. Instead of hoarding work, it is actively shared and extended – with the result that much devlelopment is being done 5 to 10 times faster. This is brining a new model for devleoping software – crowdsourcing, where the orgininating developer "seeds" a new idea and asks the community to extend/develop it. Once robust functionality is built, the originating developer wraps a support, training and documentation offer around it – like Red Hat did for Linux.
Processing power on demand is changing time to innovation and cost of failure. The cloud, exemplified by Amazon Web Services (AWS) is transforming R&D. One Fortune 500 pharmaceutical firm has front-ended AWS for management and security purposes and on the back end is using AWS provisioning in a segmented private cloud at Amazon. The result – every clinical trials researcher now has their own AWS account and can request up to 100 servers through their Service Catalog – which are operational in 15 minutes and can be run for a couple of hundred dollars! This has cut the cost of a clinical trial from $750,000 to $250,000 and shortened it from 2.5 years to 1.7 years. But here's what's really astounding. As the cost of failure (time and money) approaches zero, innovation explodes.
Just dawning, the Internet of Things brings machines to the party as full, interactive participants in their social community. GE has launched a program called GE Share, where for example, a jet engine interactively participates in a social forum with engineers, maintenance providers, product management, sales, marketing, business executives, partners, pilots and mechanics – everyone who interacts with the engine over its useful life.
We are entering what Forrester calls the Age of the Customer.
Source: Forrester Research, Inc.
They define it as "a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers."
The global cloud is eliminating traditional sources of corporate power such as manufacturing, distribution, perceived quality and longstanding customer relationship data. Almost any company can now get these quickly in the cloud. The power of instant kanowledge is now in the hands of the customers and in communities of customers. Who doesn't use Amazon Prime? Amazon has so refined the customer shopping experience that it is hard not to want to be part of it. Last year more people researched products on Amazon than on Google! According to Forrester, "The only source of competitive advantage is the one that can survive technology fueled disruption – an obsession with understanding, connecting with and serving customers."
Never in the last 30 years has so much changed so dramatically at the same time. "Everything Is Changing" combined with "The Age of the Customer" demands agility, speed, flexibility and incredible connectedness from enterprise IT. But it also requires beauty, simplicity, completeness and a predictive ability, ever evolving, to deliver a winning customer experience.