Posted by: Craig Terblanche

It all started with miniaturization empowering individuals

It took Microsoft ten years to dominate the home PC market and another ten years to dominate the corporate market. By the end of the nineties PC’s were found in every home that was not living on the bread line and by the year 2000 they were standard issue on every corporate desktop or a laptop. Until the late eighties technology was big, ugly, slow and boring in many ways. The personal computer (PC) represented the beginning of the miniaturization trend that we now take for granted. The PC and many other technologies have become ubiquitous and the consumer market has driven this ubiquity. The real benefit of course is that the power (to compute, communicate, publish and work with the wider world) is in the hands of the people that do the work.

Supplier push dominated the corporate market

In the corporate market however, technology uptake and particularly the proliferation of applications has been relatively slow, inhibited by the old guard (the abominable no-men) and the control of a few techno wizards deciding on the products and offerings that their organizations would use.

Initially, supply was limited and suppliers could dictate price and functionality to the market. Early technology applications were created and funded by suppliers with the means and resources and the proliferation of these was supported by huge research, development and marketing spend. In those days they were called software applications but today we just call them “apps”. The so-called killer apps (those that fundamentally change the way people work) were few and far between, spreadsheets probably being the first of these.

Mobility shifts the power back to the people

The greatest game changer is arguably the mobile phone, as many of our phones today run more applications with greater ease than the early PC’s could. Consumer demand for these devices seems insatiable with the entry and adoption age becoming lower all the time. Our children master the technology and the tools along with it, at speeds that make your head spin if you’re anywhere over thirty. This rapid and early adoption also has the effect of accelerating the proliferation of new technology applications. And of course, young people grow up and enter the workforce. Their expectations of computing power are vastly different from those provided by in-house IT departments. So where they can’t find what they want, they merely bypass the system and go get their own apps. IT Departments try to control this, but in the medium term this will prove to be a futile exercise. Mobility and self-selected apps are here to stay.

The network is the computer

I recall a visionary presentation in the nineties entitled “The network is the computer”. This has finally come to pass. The power of mobility and the mobile phone is extended substantially by apps accessible on the network. The killer app here is probably mobile payments, particularly in Africa were cash is difficult to secure but more and more information-based services are either freely available or at least freely accessible. Two recent examples that caught my attention are the Indian fishermen who check the fish prices on their mobile phones using a smart app that consolidates that info before they decide which harbor to dock at. Naturally they dock where the best price is being fetched for their catch of the day. On the other end of the food chain was the bank in Denmark whose market was completely saturated. Every child in Denmark has a bank account at 5 years old and they typically bank where their parents have always banked. This bank launched the first banking app for the Apple iPhone and acquired eighty thousand new customers within weeks. The power of smart phones along with the availability of Internet access has resulted in a revolution. The tech aware Gen Y population has come of age and has the power to make their requirements into demands. This has the effect that consumer demand is growing exponentially.

The connectedness of mobility

What is really interesting though is how mobility (the combination of devices, networks and apps) is closing the digital divide more rapidly than one would have expected ten years ago. Readily available devices, networks and apps in the third world have a profound effect on market reach. When cellular providers initially launched in Africa, they met their penetration targets in a third of the time anticipated in their business plans. The pent-up demand was huge and largely, unanticipated. The size of the short message service market (SMS or text messaging) was also deeply underestimated. Connections between people are multiplying exponentially: If two people are connected, you have one possible connection. If five are connected, you have ten possible connections, If twelve people are connected you have sixty-six possible connections. As more people have access, more people are empowered to provide information and services to one-another and there is more consumer pull.

The proverbial wheel has turned

Microsoft's strategy of penetrating the market via Windows for the consumer has arguably been more successful for Google with Goggle apps. We know what that did to IBM in the PC and Lotus Notes spreadsheet market. But now that "the network is the computer" it's not only Google that Microsoft is competing with. Their launch of office 365 yesterday bears testament. There are thousands of useful, "good enough now" apps available on the net all winning "the hearts and minds of the people". The market has turned from supplier push to consumer driven demand. That is the real threat for Microsoft. The Google phenomena and cloud computing represents a huge proliferation of free apps that are provided by thousand of developers in hundreds of communities. In the same way as Windows resulted in the consumerisation of the PC, network apps are driving the consumerisation of Enterprise IT. People are bringing their own devices and their own apps to the workplace, whether the Enterprise likes it or not.

The coming market revolution

Driven by changing business needs and global economic factors, organizations must do things differently – some have already started and are showing quick successes. Speed, agility, mobility, reuse, and innovation are the transformative factors forcing organization’s to push aside old technologies and communication models to make way for new ways of working. Of the organizations trying to move ahead in the new world of work, many are struggling to keep pace with the consumerization and mobilization fueled by collaboration technologies. Web-native collaboration solutions are continuing to grow in popularity, and not only with the “net generation.” Against a backdrop of shrinking IT budgets and increased expectancy, business and IT managers are eyeing the opportunities afforded by cloud-based collaboration offerings and alternative delivery models for their existing information management and collaboration solutions. Amazon offers “the platform” as a service. Google offers the office suite as a service. Salesforce.com offers CRM as a service, and the list goes on. The consumerisation of the enterprise software market has changed the game forever for IT service providers and software resellers.

According to Infographics, worldwide internet traffic will approach ONE zetabyte per year by 2015, four times what it is today. They say this is driven by four factors:

• An increase in the number of devices
• Additional internet users
• Increased broadband speed
• More video

I would contest that “more, cheap or free apps” is the driver for Africa rather than video. Smart phones are only just entering the African market but in five years all phones will have some ability to run apps.

The pending organizational revolution – its time to act

But what of the IT department and the role of business in its use of IT? As enterprise users vote with their feet, bypassing conventional corporate systems, internal IT service providers have to reinvent themselves to support business value rather than technology for technology sake. The power has shifted to business people. They don’t need to or care to understand the technicalities of the service. All they need to do is apply the service effectively for business gain. We call this applied competitive technology or ACT.

To make the change from IT to ACT requires leadership, commercial skills, and a total rethink of the role of in-house IT (or in the new world ACT). The new ACT practitioners influence rather than control, source rather than develop, and focus on technology only when it involves security and integration. Their main objective is the successful application of technologies to generate business results. Finally they have a keen appreciation of the competitive use of technologies and are involved in the development of new products, markets and channels to gain competitive edge. Importantly their philosophy revolves around the “good enough now” concept rather than “perfect later”, a philosophy often already adopted by business and IT traditionalists.

CXO Advisor has a number of IT and business transformation services that focus on the business skills of strategy and leadership, procurement and sourcing, innovation and entrepreneurship, economics and finance, human resource and people management and operations. The key to this transformation is what we call IT posture. How must the IT posture of the organization change to ACT?