By: Nishant Batra
(Head of Engagement Practices, Ericsson India)
The first major tech IPO from Silicon Valley’s enterprise content collaboration company Box this year demonstrated stock market appetite for enterprise technology companies with a radically different business model to their predecessors. This pure-play SaaS firm embodies much more than the way IT is purchased and deployed. The new tech era we are currently experiencing has the potential to deliver unimaginable growth for business and society as a whole. By 2020, advanced mobile technology will be commonplace around the globe, 90% of the world’s population will be covered by mobile broadband networks and 70% will be using smartphones, according to Ericsson’s latest Mobility Report 2015.
The shift represents a type of change we’ve not seen for over a century.
The ICT inflection point
In a 20th century factory floor, the workshop assembly line did not support division of labor. It was a highly inefficient system, and the factory worker was a true generalist, building an entire product from beginning to end. When the technology eventually evolved to support the more efficient assembly line, so did the entire process of manufacturing. We are now standing at a similar inflection point with ICT. Mobility, high-speed broadband availability and cloud are the engine rooms for innovation that even Box has yet to fully realize. Whether its sensors, 3D printing or advanced robotics, these innovations have the potential of delivering rapid increases in business productivity.
Moore’s Law, the theory that computing processors will double in complexity every two years, continues to reign true and superior processing power is now reaching practically any device. When all these devices are connected, there is a rapid acceleration in the power of ICT. It becomes truly transformational. This pace of innovation is relentless. As we’ve seen through trends such as Bring Your Own Device (BOYD), the big difference is that these innovations are no longer the preserve of IT departments. With billions of connected devices, the potential extends even further. It’s the reason why starting a global business these days requires little more than an idea, a user base and a network of collaborators. It’s also why we hear the word ‘disruption’ so often today. But unlike a decade ago, we now have a much better sense of what this means. This change is underpinned by a sea of data. Huge sums of knowledge and insight that offer businesses the ability to perform like never before – an entirely new definition of the factory line.
A New Logic
There is a New Logic being applied across industries. The era of Spotify, Netflix and countless other game changers in the media sector has demonstrated what can happen to a fully digitized industry. SaaS models like Box highlights what is already happening in IT. Mobile banking and crypto currencies are beginning to have an impact and are already creating disruption in the financial sector. At Ericsson, we’ve had first-hand experience with companies and sectors that are evolving business models to meet the challenge. Take the transport industry as an example. With Volvo we are working on the next generation of Connected Cars. The car itself is now an open platform for other players in the automotive ecosystem. Third parties such as infotainment providers, road authorities, cities and governments have the opportunity to create new innovative services for drivers.
Maersk Line, the world’s largest ocean carrier wanted a communications platform that would connect 350 vessels in its fleet. Today, this system has cut fuel costs and increased the value of Maersk’s logistics. It has also significantly boosted fleet management capabilities while reducing its CO2 footprint. In other parts of the world, the city of Curitiba in Brazil was the first to connect public buses to a mobile-broadband network. In doing so, it has provided a more reliable bus service used by 70% of all commuters. This service produces 200 thousand tons of CO2 emissions per year, which is dramatically lower than the 1.5 million tons generated by annual car travel.
This change represents the potential of a Networked Society. It’s a society where businesses can play a critical role in the way we innovate, collaborate, produce, govern and achieve sustainability. There are obstacles. When existing institutions are challenged, the legal, commercial and social frameworks that underpinned them need to be modernized. New practices and assets are needed. For example, connected robots may well sharply increase productivity but this again leads to bigger questions about the future of work. SaaS is only half of the worry. What is the role of IT in a world where there 3D Printers and Self-Driving Cars are part of the corporate infrastructure?
The good news is that the opportunities are around the corner. As with the world of tech IPOs – we need a little more confidence.