In 1965, Gordon E. Moore put forth the idea that the number of transistors on a computer microchip would double every two years while the cost would cut in half. Technological growth, Moore postulated, would be exponential. Moore’s theory, dubbed “Moore’s Law,” might not be 100% accurate (for example, the number of transistors on microchips doubles about every 18 months). Over half a century ago, though, Moore hit on one absolute truth: Technology, and not just microchips, moves at lightning speed. If there’s one universal business maxim, it’s to ignore technology at your own peril.
According to Gartner insights, Mobilize Every Function in the Organization for Digitalization:
- 87% of senior business leaders say digitalization is a company priority
- 67% of business leaders say their company will no longer be competitive if it can’t be significantly more digital by 2020
How fast is technology changing?
As Moore had predicted, technological change is exponential. Even old fashioned brick and mortar businesses are learning to adapt or get left behind. Here is a taste:
- By 2020, 50 billion smart devices will be collecting, analyzing, and sharing data.
- The web hosting services market is to reach $77.8 billion in 2025.
- 70% of all tech spending is expected to go for cloud solutions.
- There are 1.35 million tech startups.
- The Global AI market is expected to reach $89.8 billion.
- There are 4,383 million internet users.
- Solar energy adoption has grown by around 50%.
There are currently 1.6 billion websites. Over the next few years, the Big Data market is expected to reach $103 billion in revenue. Web hosting is expected to exceed $77 billion. Cloud computing is worth more than $200 billion.
All of these numbers may seem abstract until you realize how tech influences every type of business and every aspect of our lives. Today’s consumers expect sophisticated connectivity that merges efficiency and accuracy with a perceived personal touch. That puts corporate IT departments in an endless race to satisfy those seemingly contradictory consumer demands and meet shareholder expectations, all while seamlessly maintaining daily operations.
Famous trendsetters who failed to keep up
Even the world’s most technologically innovative companies can’t afford to take their eyes off the road ahead. Just a few short years can take a company from industry leader to nostalgia brand, or worse. Here are a few businesses that spent decades at the top of their respective industries, only to be toppled by more technically savvy competitors:
In the 1990s, a casual weekend at home wasn’t complete without a trip to a local Blockbuster Video. At one time, they had more than 9,000 stores under their brand. Today, they have one, in Bend, Oregon. Blockbuster was not the first video rental store, but they designed a barcode system that let them track up to 10,000 video cassettes, which revolutionized the industry’s ability to collect late fees. At one time, late fees accounted for about a quarter of Blockbuster’s annual revenue. The sheer size of the company allowed them to build a massive distribution center, and custom tailor a store’s inventory to the area’s demographics.
Then along came Netflix with their DVD subscription-by-mail business model. With Netflix, consumers could say goodbye to late fees and they didn’t even have to leave their homes to get a movie. The movies were mailed right to them. In stark contrast to Blockbuster, Netflix’s overhead was almost nil. Today, Netflix has more than $161 million paid memberships. It’s maintaining its technological relevance through in-home streaming services and unique content production.
In the early 2000s, before most had heard of Facebook or Twitter, MySpace pioneered social media. By 2006, MySpace beat even Google as the most visited website in the United States. By 2008, MySpace was overtaken by Facebook. Experts blame MySpace’s insistence on its narrow focus of music and entertainment, while Facebook and Twitter forged their business models on innovation and change. MySpace is still operational, but it has a fraction of the page views of Facebook, Instagram, or Twitter.
When most people think of Xerox, they think of office printers and copiers, but the tech landscape would look very different today if it weren’t for researchers at the California company. In 1968, a Stanford engineer named Douglas Englebart invented the graphical user interface, or GUI (pronounced “gooey”). Researchers at Xerox’s Palo Alto campus built upon Englebart’s GUI technology and developed the Xerox Alto, which introduced the world to windows, icons, and a rudimentary computer mouse. What happened next would go on to become tech legend.
The Xerox Alto ran on an operating system/development environment called SmallTalk that was created in-house by Xerox PARC researchers. In 1979, 24-year-old Steve Jobs of tech upstart Apple Computer, Inc. paid $1 million in Apple stock options for a detailed tour of the Xerox PARC facility. Blown away by the SmallTalk GUI, Jobs demanded the product’s technical documentation, which Xerox foolishly handed over.
With the specs for the SmallTalk GUI in hand, Apple released the Lisa in 1983, the first commercial computer to feature a “windows” GUI. Jobs would use a similar GUI for the much more popular Macintosh models. When Bill Gates, who wrote software for the Mac, released Windows 2.0 in 1987, Apple sued Microsoft for blatantly stealing the Mac’s look and feel — something Apple stole long ago from Xerox. Apple eventually lost the case and Microsoft’s subsequent dominance of the PC market made ‘windows’ synonymous with Windows.
One could argue that the Xerox case is less about getting left behind and more about a poor business decision, but the bigger picture is that Xerox failed to capitalize on its technology because they failed to evolve and upskill. “The entire corporation was based on the copier industry,” Michael Hiltzik, Pulitzer-prize winning columnist for the Los Angeles Times and author of Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age, said. “It had a whole bureaucracy and employee base built around that Xerox wasn’t nimble enough to transition to a brand new market it had no experience with.”
At #318 in the Fortune 500, Xerox is clearly still alive and doing quite well, selling copiers. But Microsoft and Apple, two of the most technologically innovative companies in the world (who might not be in existence without Xerox), are ranked #26 and #3, respectively.
What future trends should we look for?
CIO Magazine lists eight technologies that will disrupt business in 2020. Those include:
- Artificial intelligence
- Video and unified communication
- Containers and microservices
- Immersive experiences
- IoT and edge computing
If your company isn’t planning a digital transformation in the near future, know that your competitors are.