Paul Wallbank – Communications Professional
Comms, journalism and writing
It appears Marissa Mayer’s tenure is coming to an end at Yahoo! as the company still struggles to find a place in the world
It appears Marissa Mayer’s tenure is coming to an end at Yahoo! as the company still struggles to find a place in the world reports Forbes.
A simpler business environment means lower margins. If you profit from complexity you have a problem
“The cardinal sin of the computing industry is the creation of complexity,” is quote attributed to Oracle founder Larry Ellison and often repeated at the company’s Open World forum which I’m attending at the moment in San Francisco.
For the computer industry that complexity has been a very profitable profitable business with everything from the local computer shop through to the big technology vendors and integrators.
One of the biggest beneficiaries of that complexity were the salespeople, big complex enterprise deals meant big commissions.
With the shift to cloud services and apps, those fat margins and commissions have evaporated, leaving the lucrative old models of business stranded. IBM are probably the greatest victim of this while Microsoft are, once again, showing the company’s ability to evolve in the face of a fundamental market change.
For the salespeople the days of fat commissions are over, with thinner margins it’s not possible to pay big lump sums for winning contracts.
The simplification of the computer industry is changing the fortunes of many IT businesses, but that change isn’t limited to the tech sector or their salespeople as those fundamental changes are rippling into other sectors.
A constant claim by Internet of Things evangelists is that the IoT will squeeze inefficiencies out of businesses and this is exactly what we’re seeing with cloud and mobile based services like Uber and AirBnB.
If you’re in a business that profits from market inefficiencies then it might be time to figure out how to survive in a low margin environment. The challenge facing companies like Oracle is one whole industries are now having to face.
It looks like Twitter won’t get the focused professional management it desperately needs.
Twitter’s new Executive Chairman finds the service intimidating to use reports the Wall Street Journal.
With a distracted CEO juggling the Initial Public Offering of his other business, it’s hard to see how Twitter is going to get the focused management and supervision it desperately needs to maintain its valuation.
In an interview with LinkedIn founder Reid Hoffman, Google chairman Eric Schmidt describes how he managed the company’s high growth.
“In all my issues at Google, I knew I had no idea what to do, but I knew that I had the best team ever assembled to figure out what to do,” says Google – and now Alphabet – chairman Eric Schmidt in an interview with LinkedIn founder Reid Hoffman.
Schmidt’s interview is a great insight into managing fast growth companies,”almost all small companies are full of energy and no process”. While he reflects on his early days at stricken companies like Sun (“tumultuous and political”) and Novell (“the books were cooked, and people were frauds”).
Moving to Google he found all of his management skills exercised at a company with a unique culture and rapidly growing headcount.
One notable anecdote is how Larry Page kept a 100k cheque from an early investor in his pocket for a month before cashing it.
Compare and contrast that attitude with the current startup mania where by the end of that day a media release would be issued proclaiming the company to be a new unicorn on that valuation.
Schmidt’s view, like many others, is that the real key to success in the company is the people. This echoes the interview with Meltwater’s CEO earlier this week where Jørn Lyseggen described how the key to starting a venture in a new country was the first five people hired.
One great takeaway Schmidt has from his time at Google is how great companies are created through the Minimal Viable Product method, “the way you build great products is small teams with strong leaders who make tradeoffs and work all night to build a product that just barely works.Look at the iPod. Look at the iPhone. No apps. But now it’s 70% of the revenue of the world’s most valuable company.”
Ultimately though Schmidt’s advice is to make decisions quickly, “do things sooner and make fewer mistakes. The question is, what causes me not to make those decisions quickly.”
“Some people are quicker than others, and it’s not clear which actually need to be answered quickly. Hindsight is always that you make the important decisions more quickly.”
Blown away by the internet, Meltwater founder Jørn Lyseggen planned to build the world’s smallest software company. Fate had different plans
“The next day I quit my job. I remember walking home that night and thinking I felt incredibly privileged to be living right at this point and I was going to see how the internet would unfold.”
Jørn Lyseggen, the founder and CEO of media monitoring service Meltwater, was describing his first encounter with Netscape 2.0 in 1995 while working on artificial intelligence at the Norwegian Computer Centre.
Today, Meltwater has 1,100 employees in 41 cities across 21 counties and Jørn spoke to Decoding the New Economy in the company’s San Francisco head office last week.
Having quit his job as a researcher, Jørn became what he describes as ‘an Internet evangelist’ in the early days of the Norwegian web and founded a series of online businesses including Norway’s first web mall.
The fourth business Jørn set up was Meltwater which they originally operated out of a shed in a disused shipyard, Shack 15. “We got free office space from one of my former clients,” he recalls. The old customer also gave them 25 old computers which they patched together to become the company’s first server farm.
“Our aspiration originally was to create the world’s smallest software company,” recalls Jørn. “We wanted to be four engineers creating the most sophisticated technology in our industry then we would sign up resellers then sit back and watch our revenue go through the roof.”
At the time media monitoring was largely made up of clipping services that would hire armies of contractor to physically cut and paste newspaper articles.
“What we wanted to do was build software that could keep track of everything that was published online,” Jørn explains. “When news started to come onto the internet then you could start to analysie it automatically. We thought there would be a better way to do this with algorithms and software.”
It turned out however the plans to have a small software company didn’t work out. “We poured our heart into our technology for the first year and then we got really excited when we signed up two really respected resellers in the Norwegian market.
“They presented to 1500 companies, which is a really big number in Norway, and the results were devastating with 1499 ‘no’s and one maybe.”
For Meltwater’s founders it was a time for re-evaluating the idea. “That was a pivotal point in the company as we had to ask ‘is this a business?’. What we realised was that we were too focused on the technology and what clients are really worried about at the end of the day are the pain points.”
“Once we did that switch we started to get business and then we grew very quickly so instead of being the smallest software company in the world we set out to become the biggest in our industry.”
From there the spread across Northern Europe and the UK, “every time you start up in a new country it’s like starting a new company.” Jørn ruminates. Strangely it was Germany that proved to be the most difficult to break into. “It’s counterintuitive, you’d think the shared culture would make it easy for a Norwegian company. It wasn’t.”
The big move though was the United States, on the basis that any company with global aspirations has to be in the world’s biggest market. “Norway is a small country, we used to joke there are bus stops in New York with a bigger population than Norway.”
Jørn was surprised to find the US was an easy market to break into than the United Kingdom or Germany, “I love their open mindedness and the welcoming factor of the US culture,” he smiles.
“They are very open minded in the US, it’s a strength in their culture. In the US if you present something interesting to them they’ll accept it. The flip side is if they are open minded to you then they’ll be open minded to your competitors.”
Choosing the right people is the key to business success Jørn believes, with local hires being essential when expanding into foreign markets, “You need some local credibility.”
More importantly though is the importance of getting the right people early in the life of a startup business, “It’s all about culture.” He states, “make the first five to ten people the base for your platform.”
Having the right people also made it easier for his management team to delegate as executives focused on the international expansion. “We’ve got really smart young people working here, they don’t miss me when I’m not around,” he smiles.
“Back in the day it was considered you started a company because you couldn’t get a job,” Jørn laughs. “I’m the first to encourage entrepreneurship but it worries me when it becomes trendy.”
“It’s important that entrepreneurship doesn’t become too romanticised. Because it’s really hard work and most startups fail and most people have to work for years while barely getting by financially and it’s high stress”
“I never saw myself as a business person,” Jørn remembers. “I had a healthy scepticism to the commercial world, that’s why I became a research scientist because I thought it was a better use of my time.”
However the revelation of Netscape 2.0 changed all that, “it really blew my mind,” he grins as he recalls how he decided “the best way to be part of this was to be in my own business.”
Building your own business though is not an easy process and there’s tough decisions to be made. Jørn though believes that the hardest times running your own business are not when cash is tight but when the tough decisions have to be made, “sometimes you have to make calles that are challenging.”
For Jørn, he only sees more exciting times ahead as the internet evolves, “social is still in its early stage. A lot of companies struggle and worry that they haven’t figured it out, but the truth is most people haven’t figured it out.”
Paul travelled to San Francisco as a guest of Oracle
How is business being reinvented in a world of cloud computing.
Last week at the AWS:Reinvent conference in Las Vegas, I had the opportunity to interview the company’s Global Head of Enterprise Strategy, Stephen Orban about where he and Amazon see the direction of the cloud computing market and how business practices are being reinvented.
Among the things we discussed was Orban’s seven best practices for a company’s journey to the cloud, gleaned from his own experiences in his AWS role of advising clients on adopting and his previous experiences as a technology officer at Dow Jones and Bloomberg.
Orban laid out what he thinks are the keys to success in a company heading to the cloud in his own blog post and during our conversation he expanded on his ideas which also very much reflect the changing role of the CIO or IT manager.
The first point is the IT department has to understand the business and align technology with the organisation’s objectives.
“Somebody who understands technology who can merge technology with the business needs” will be better able to win the confidence of management says Orban.
Doing that is the key to winning support from the executive suite Orban believes. Once CIOs have that trust from senior management it gives their teams the space to experiment with new ways of delivering value to their companies.
“The second thing is to provide training and education,” Orban says. “People tend to get a bit anxious of what they don’t know, particularly when it affects their jobs.”
In Orban’s experience, having informed staff makes them more open to change within the business, “with the transformation I went through at Dow Jones, most of what we accomplished was because of the people who’d been there a long term. They had the institutional memory but they were very open minded.”
One of the great benefits of cloud computing is how it lowers the costs of experimentation and development, “gone are the days when it cost hundreds of thousands of dollars, even millions, to try something.” Orban says.
Learning what works and fails is essential, he believes. But as long as there is executive support then a tolerance towards unsuccessful experiments will develop in the organisation.
Outside parties are essential to most organisation’s IT systems and Orban believes partner ecosystems have changed with the advent of cloud computing. “There’s a whole new breed of partners that have been going through this,” he says in citing ‘born in the cloud’ software developers and systems integrators who are changing how projects are being delivered.
“Creating a center of excellence is, I think, one of the key practices any organisation should invest in. You want a body of people who can institutionalise best practice within an organisation,” observes Orban.
As cloud services take away the complexity of computer systems it becomes an opportunity for organizations to rethink boundaries between the IT department and business operations.
Given Orban’s employer it’s not surprising he sees cloud computing as key to a company’s transformation however he admits that few organisations will make the jump straight into cloud services.
“Hybrid will be a part of every enterprise’s journey. Any company who’s been doing IT for any period of time will have existing investments,” he says. “Our view is that we will make it as easy as possible to create that bridge.”
“We do believe in the long run that enterprises will find they become so much more effective over here (in the cloud) they will move in that direction.
Once an organisation has its cloud strategy and experimentation culture in place then having a ‘cloud first’ policy, “it reverses the burden of proof away from ‘why would you use the cloud?’ to ‘why wouldn’t you?'”
While Orban is emphasising the Amazon Web Services view of the world where ultimately all business computing will be done on the cloud – preferably their cloud – his views illustrates the change facing businesses as they implement online technologies.
For most, the availability of easily accessible cloud computing services is an opportunity to rethink their business processes and how organisations can deliver the best products quickly to their customers.
Google completes its transformation into Alphabet, soon we’ll see how effective it is.
As announced two months ago, Google quietly morphed into Alphabet after stock trading closed on Friday. The Wall Street Journal describes the new structure and the rationale behind it.
It’s hoped putting the smaller, more speculative operations into a separate business units from the company’s core search and advertising businesses will allow managers to be more focused on the business while giving more flexibility to the newer divisions.
One of the major reasons for Google’s reorganisation is the company had become too unwieldy with the WSJ story quoting one former employee who illustrates the problem.
Many entrepreneurs believe “it’s easier to do their business outside Google rather than inside,” said Max Ventilla, who left Google in 2013 to found an education startup. “There’s a lot of red tape for head count and money to get through at Google.”
At the moment it’s not clear that headcount is going to fall under the new structure and certainly some more revisions to the core business are going to be needed to get focus back for products like Google Docs and the local business search operations which have been drifting for some time.
Over the next two years we’ll see how successful the new structure is. If it works, then Alphabet could be showing the new model for corporate conglomerations.
Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his book Lethal Generosity.
Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his latest book, Lethal Generosity.
In this book, Israel’s previous works include Naked Conversations and Age of Context which were both written in collaboration with Robert Scoble, he looks at the technological and social changes affecting business and how they can adapt to a rapidly evolving marketplace.
Key to that evolving marketplace is the explosion of data offering businesses deep insight into their customers. as Scoble describes in Lethal Generosity’s introduction in talking about social analytics service Vintank;
VinTank was acquired by a big PR agency that wants VinTank to do for all sorts of industries what it has done for the wine industry. Are you a restaurant or a winery ignoring that data? Go ahead and keep doing that for a decade. Your competition won’t.
Israel illustrates the need to watch the marketplace in citing a campaign where Canadian brewer Molsons completely wrong footed an oblivious competitor, something similar to how one bank discovered a rival’s successful marketing campaign through real time bank deposits data described at the recent Splunk conference.
A customer centric outlook, not looking at competitors but focusing on what consumers want is key to success in the new economy, Israel believes. This is enhanced by technologies that allow both products and marketing to be personalised as shown in the chapter detailing how retailers and airports are using beacons and data analytics in their operations.
One good example is AirBnB, while Israel trots out the ‘biggest hotel chain’ in the world fallacy that’s pervasive among commentators, its effects on the established industry has been profound and have forced hospitality operators around the world to re-evaluate their business models.
Israel suggests the best response for businesses affected by the ‘Uberization’ of their industries is to adopt the social and analytic tools and strategies being used the upstart businesses and he provides a wealth of examples.
Tapingo, the food ordering service for US college students, illustrates the seamless experience that consumers are increasingly demanding in their shopping, business and leisure activities. Israel cites how Tapingo’s merchant partners are seeing an in-store traffic boost of 7 percent and a gross profit rise of 11 percent as a result of using the service.
Shel also illustrates some of the failures in deploying new technologies, specifically London’s Regent Street Alliance that failed due to poor execution and a failure to engage the marketplace.
One of the weakness in the book – which Israel acknowledges – is its focus on US, and specifically Bay Area, case studies. While there are some non-North American examples such as Australia’s Telstra and China’s Alipay, most of the examples cited are of companies based in or around San Francisco and Silicon Valley.
Another weakness of the book is the over-focus on Millennials or Digital Natives. While this group is important that obsession risks Israel’s message being pigeonholed amongst the noise of poorly thought out pop demographics and poor analysis that marks much of the discussion around changing tastes and habits between generations.
Israel’s point that the post 1982 generation will soon outnumber older cohorts in both the workforce and the marketplace in the near future though is an important aspect for businesses to keep in mind with the safe certainties and predictable customer behaviour of the baby boom era being long gone.
However the shift in consumer and workplace behaviour is just as pronounced among all the post World War II generations as technology and the economy evolves in the early 21st Century. Focusing on the younger groups risks missing similar shifts among older members of the community.
Ultimately though, Israel’s message is about customer service. Shel himself flags this is not new, in describing the competition between hiking goods suppliers The North Face and Sierra Designs in 1970s Berkeley.
What is different between today’s businesses and those of forty years ago is technology now allows companies to deeply understand their customers and provide customised marketing, products and experiences to the connected consumer.
For the business owner, manager or entrepreneur, Lethal Generosity is a good starting point to understand the forces changing today’s marketplace. The case studies alone are worth considering for how an organisation can adapt to a rapidly evolving world with radically shifting customer behaviour.
There are five key questions every business leader has to answer for their venture to be successful says Salesforce founder Marc Benioff
Probably the best regular session of the annual Dreamforce conference is the final session where Salesforce founders Marc Benioff and Parker Harris answer questions from the attendees.
As with any open microphone session, some of the questions are silly but many highlight frustrations Salesforce’s customers have and some give the opportunity for an insight into Parker and Benioff’s thoughts away from the scripted glitz of the main keynotes.
One questioner asked Benioff and Parker what their advice would be to someone in their position of 16 years ago with a new business.
“Don’t think about the tools or the technology,” said Harris. “Thing about the problems you can solve. Stay focused and work hard and build a great company.”
While Parker also emphasised a great team is another important element, Benioff flagged an element of luck in building a successful business, “we got the timing right.”
Ultimately though it came down to making the jump from a comfortable, if frustrating, corporate job to a risky startup.
“I remember I was working in a big company for a long time, very unhappy.” Benioff recalled and noted the decision to strike out on your own is very much a personal decision, that can only be done when you are convinced it is time.
Knowing when that time has arrived comes down to five questions, Benioff believes.
“It all starts with you, you have to get clear about what is it that you really want, what is really important to you, how are you going to get it, how will you know when you’ve got it and what is preventing you from having it.”
“When you can answer all those five questions you’ll have clarity in your direction. The problem with most small businesses – and big businesses – is they can’t answer those questions.”
“If you can answer those questions then you can break out.”
Ultimately Benioff and Parker flag focus as the key individual attribute and being able to focus on answering those five questions is a very good first step to having a successful business.
Today’s high growth businesses could be in tomorrow’s deadpool
“From the EMC boardroom you can see the carnage of the mini computer industry – Wang, DEC, Data General – you can see their buildings from the headquarters,” said VMWare’s CEO Pat Gelsinger during an interview this morning.
Gelsinger’s point is well made, those companies were victims of the last major computing shift which saw the minicomputer fall out of favour and be replaced with workgroup servers largely running Windows.
For VMWare, those Windows based servers were the basis of their successful virtualization product and the company was one of the winners of the shift to Personal Computers.
Now a shift to the cloud, something that Gelsinger sees as a bigger and more fundamental change than the one that dispatched companies like Wang, DEC and Data General to the deadpool in the 1990s, threatens to do the same to the companies that did well in the PC era.
That shift is seeing VMWare repositioning their business to their “unified hybrid cloud”, Dell shifting away from being primarily a PC manufacturer and Microsoft rethinking its entire existence. All of these companies are deeply threatened by IT’s move to the cloud and mobile services.
It isn’t just today’s incumbents that are threatened by shifting markets, a few of the current crop of today’s billion dollar unicorns will almost certainly become ‘unicorpses’ warns Nick Bilton in Vanity Fair.
That some of today’s seemingly untouchable tech startups may also join venerable older companies in the history books may surprise some but the risks are high, the shifts are great and the successful business strategies are not always obvious early in a technology shift.
One clear point is that size is no barrier to eventual failure, as we see with once untouchable giants winding up after technology and markets move against them it’s only the fast moving and flexible thinking that will survive.
We’re in a time where when taking risk is the lowest risk in business says VMWare CEO Pat Gelsinger
“It’s no longer the big beating the small, it’s the fast beating the slow,” says Eric Pearson, CIO of the InterContinental Hotels Group.
Pearson was quoted by VMWare CEO Pat Gelsinger in his five imperatives for digital business keynote at the VMWorld 2015 conference being held in San Francisco this week.
The five are an interpretation of the trends in a radically changing business environment where the barriers to entry have fallen dramatically, industries are globalised and the time to market for new products has collapsed.
Put together, Gelsinger believes established businesses have to be more nimble as market and industry forces are going to punish those who are too slow to adapt.
Gelsinger’s initial point is the world of business is now asymmetric – incumbents have everything to lose in the face of new businesses where upstarts have nothing to lose.
Part of that asymmetry comes from the world of shared resources, which gives startups and smaller businesses access to tools that were once only available to large organisations.
An obvious example of this are the cloud computing services that is concentrating VMWare’s minds, however another good example of how shared resources will change industries is the self driving car where Gelsinger cites vehicle utilisation will go from 4% to 71%.
Gelsinger points out using a car on a pay for use basis will change the structure of our cities which in turn changes the economics of living in suburbia and the business models built around it.
Cloud computing is at the end of its formative, experimental phase and entering into a professional era where different types of services are going to have to work together.
“We have the private cloud which is focused on IT as we know it today, pulling out costs, slow and complex applications but also has powerful governance and does what I need it to do while meeting compliance purposes,” said Gelsinger. “On the the other side we have the public cloud which is fast and is able to scale effectively but has weak governance.”
In a perverse way, it’s Edward Snowden’s revelations that are driving many businesses to maintain their own private cloud networks due to concerns about foreign powers tapping their information flows and the sovereignty of data.
The consequence of a range of different cloud environments mean they are all going to have to get along with open standards becoming more important as businesses ‘mix and match’ their requirements.
As the Snowden affair shows, IT Security is difficult, complex and messy and becomes more so as workers start using their mobile devices and data is pushed around the cloud.
Gelsinger sees the online security sector as being the one of the biggest opportunities for startups and one of the fastest growing costs for business, “the only thing growing faster than the spend on security is the cost of security breaches.”
While Gelisinger’s focus is on VMWare’s security proposition, the security mindset is going to have be adopted by all business people. As the Target and Ashley Madison breaches have shown, the damage that can be done by a security lapse can be crippling and is a tangible business risk that senior managements and boards need to be across.
Artificial intelligence has been through a thirty year gestation and Gelsinger told of his early days as a computer engineer working on AI projects in the late 1980s. Those early days of AI were a failure as the results as the time didn’t live up to the hype.
Gelsinger sees this as the next wave of computing as it moves from being reactive to proactive as systems become able to anticipate actions based on the data they are seeing.
While this has major ramifications for the computer industry, it also promises to change management and the role of many professions.
“This is going to change human experiences,” says Gelsinger however there will be challenges as businesses strike a balance between creepy versus convenience and invasive versus valuable.
Half of the firms on today’s Tech 100 list will be gone within 10 years, was the warning in Gelsinger’s final point and he focused on the need for businesses large and small to break out in order to stay relevant.
“Welcome to the age of rattling the cage,” stated Gelsinger. “A time when taking risk is the lowest risk.”
Paul travelled to VMWorld 2015 in San Francisco as a guest of VMWare
What are the ethical and societal considerations we should consider with today’s technology?
Technologies like the internet of things, cloud computing, 3D printing and big data are changing our industries and society. At the ACI Connect event today, I gave a presentation on some of the opportunities, risks and ethical issues facing technologists and engineers in the connected economy.
While many of the engineering principles underlying these technologies aren’t new, their scale and the power they give businesses and governments means there are serious ethical, security and societal issues we have to consider.
This presentation explores some of those issues and the technologies and trends driving them.
A conceit among technologists is that we’re in an unprecedented era of change. This is not true.
The Twentieth Century saw massive restructuring of our society as the telephone, mains electricity, the motor car and television changed our society. Many of today’s settled industries came out of the huge technological steps forward over the last hundred years.
Just as cheap energy – delivered to us through the motor car and mains electricity – defined the Twentieth Century, this century will be defined by easily accessible and abundant information.
Those changes over the last hundred years give us some hint as to where we are going; the shifts that saw coal carters, newspaper sellers and night soil men eventually become extinct, along with a shift from a largely agricultural workforce to industrialised employment, is going to be repeated this century as information becomes abundant.
Cheap and small sensors mean it’s easier to put a chip on something. In this case we have a CSIRO project tracking bee activity where Tasmanian scientists have put tracking devices on bees.
Those tracking devices would have weighed several hundred grams and cost hundreds of dollars ten years ago but today they are small and cheap enough to fit onto the backs of bees.
Being able to deploy these sensors means we can fit them to things we couldn’t have imagined a few years ago and the data they generate is going to give us insights into patterns and behaviours we couldn’t have contemplated.
However not all of this data is useful or necessary and some may even be damaging to individuals and groups. One ethical question we have to ask ourselves is whether it is in the community’s interests to collect this information.
Another aspect of connecting devices, or even animals and people, to the Internet or a network is it opens the possibility of hacking, as we’ve seen in the recent Jeep case where engineers showed they could control a vehicle remotely. The security and privacy aspects of the IoT are critical and something designers and product engineers can’t overlook.
It’s often said that Data is the New Oil. In truth it isn’t, data is increasingly cheap and easy to access. Being able to analyse that information is where the power lies.
Data analytics is probably going to be one of the most important fields in an information rich economy and already we’re seeing companies springing up to help farmers estimate crop yields, truck drivers plan their routes and even organisations like the Royal Flying Doctor Service using cloud services to better plan their operations.
Again these services plan a lot but there’s also downsides as inappropriate data matching risks breaching consumers’ privacy and even drawing false conclusions from confusing correlation with causation. A good example of this is Facebook being used to judge credit worthiness.
Automation – whether it’s through robotics, machine learning or algorithms – will change many industries and the workforces employed by them.
One understated field is management where many white collar supervisor jobs are at risk from business automation. It may be that the executive suites are the next sector to be decimated by computers and robots.
Similarly, many services industry jobs such as taxi drivers and baristas are at risk from robotics while large scale 3D printing of buildings threatens to put many building trades under pressure.
Driverless vehicles have a whole range of applications, in logistics were seeing them put forklift drivers out of work while mining companies are rolling out massive dump trucks in their new mines that don’t require $200,000 a year drivers.
One study estimates that half the police workforce in the United States would become redundant as law abiding driverless cars become common.
Similarly electric cars will have a massive impact on government revenues. Currently Australian governments raise $17bn a year from fuel excise and has ramifications for businesses involved in the supply chain for service stations.
Once driverless vehicles become commonplace we may well see them changing industries like daycare, public transport and couriers as it becomes possible to summon an autonomous vehicle, put the kids or the luggage into it and then send it off to its destination. If you’re worried, you can track the progress on an app.
The effects of the driverless car show how we have to think laterally about the effects of new technologies on our businesses, sometimes the effects of a new way of doing things could indirectly hurt our business or create new opportunities.
One of the great promises for the IoT, Big Data and business automation is to remove inefficiencies from industry. Cisco believe that up to 14% of the Oil and Gas industry’s costs could be stripped away with today’s technologies. That in itself is worth over a 100 billion dollars a year in cost savings.
GE are deploying their technologies into a diverse range of industrial equipment ranging from jet engines to railway locomotives and wind turbines with spectacular results in reducing costs and improving productivity.
The effect of these improvements means less downtime and maintenance costs which are good news for customers and shareholder of these companies, but bad news if you’re a maintenance business. It also means the speed of change in business is accelerating.
In summary the skills needed today are very different to those of 1915 and 1965 and those of the next fifty years will be even different.
As a society we have to decide what skills we are going to give not our children but those currently still in the workforce who are going to be working longer and later into their lives as the workforce ages.
We also have to consider what sort of ethical compass we have. While the technology we have today is powerful and capable of great things, it’s also capable of great harm. We need to have an understanding of what the effects and limits are of our actions with the Internet of Things, Big Data and analytics.
Ultimately we need to ask what value we as individuals can add to our communities and society.
