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Creating a new reality of business
I am writing this at the TechColumbus Luncheon with Dave Berkus, Founder and President of Berkus Technology Ventures, LLC. Dave Berkus is an early stage venture capitalist with a hands-on background in technology. An entrepreneur for over 50 years, he formed and managed successful businesses in the entertainment and software arenas, and is a respected technology industry leader and spokesperson.
Berkus' presentation, to a packed house, was titled "Ten Trends in Technology That Will Shape How We Plan and Execute Beyond 2008" (Note: The PowerPoint from this is available on my blog at Ideas To Deals).
A lot of good takeaways for the business looking to compete in the future world economy. Here are the trends, Berkus' comments and a few of my impressions.
Many businesses and especially small businesses are very focused on competing today. It is difficult to see the forest for the trees. But it is critical that businesses see the future and adapt to the trends that will drive market demand. In 1899 Charles Duell, U.S. Commission of Patents, said "everything that can be invented has been invented."
There have been numerous examples similar to this throughout history. The people sighting these examples could not foresee the game changing applications that were to come.
Innovation is the technology that will cause "game changing behavior." Are you ready to call an audible to win the game?
Trend 1 ~ The growing scope of the Internet: I remember trying to log onto the internet in the mid-90's on dial-up Compuserve. I can still hear that tone in my ear from all the times I would have to restart it when it crashed. I would have to make an effort to surf the web then and it was mostly for entertainment. That has all changed now. This morning I was looking for a phone number and I looked it up online, not in a phonebook. I get most of my local news headlines from Twitter. I've even removed my physical address from my business cards so I can get all of my Web addresses and social networking contact points on the card. Burkus pointed out that in three years, 20 typical California houses will generate as much traffic as the entire Internet in 1995. Twelve million new users join the Internet everyday, most of whom are from outside the U.S. The world has a population of 6.6 billion people. About 1.4 billion, or 21%, of the population, is on the Internet and only 5% of that comes from North America. The U.S. is at about 73% penetration relating to internet use, Asia is only at 15.3%. Where are the opportunities? It is estimated because of the current IP address structure in China that it will run out of IP addresses in 83 days and the US will likely run out in the next in four years. Can you imagine the software and hardware upgrades will be required to deal with this?
Is your business looking at the international opportunities associated with the Web?
Trend 2 ~ paradise of choice:
Consumer pull drives the economy more than producer push. Time and place shifting is occurring in that we can watch what we want, when and where we want. This is what I love about the internet: I'm in control. Power to the consumer! The TV show Battlestar Galactica (which I've never watched) was about to be canceled until someone realized that the viewership of the show was on the Internet. The consumer decided where they wanted their content and the networks had to respond.
This is also becoming the "Age of Recommendation" due to the internet.
- 69% of consumers research products on-line.
- 62% look at on-line peer reviews.
- 39% compare prices across outlets.
This democratization of search will drive down prices. This will also lead to accelerated product innovation. We want it now! A great example of the power of the individual is podcasting. I used to have tapes and CD's that I listened to in my car. They were usually kind of expensive and not all of the content was pertinent to me. Now I have many more choices relating to specific content though podcasts, and they are free. Berkus feels you will see more extensive podcasting networks empowering smaller players and moving power away from the big producers.
What is your enterprise doing to respond to the shift of power to the consumer?
The democratization of "production", "distribution" and "search" are changing the landscape for doing business. Once again moving power to the consumer.
- Production ~ Make It: PC music, Wikipedia, iMovie are ways the power of peer production is growing exponentially. It is no longer necessary to spend time or money to get many things done. You can do it.
- Distribution ~ Get it out there: Electronic distribution is moving bits not atoms. Moving inventory has dramatically changed due to technology. I spoke to a person from 2checkout.com today. I've only recently become familiar with them but they have really taken off. Compare them to SubmitOrder.com of the late '90's. SubmitOrder's business model was to do distribution for the big dot.com's. 2checkout provides e-commerce solutions to anyone at a fraction of the infrastructure that would have been needed by SubmitOrder. This isn't because SubmitOrder was wrong in what they were doing but rather due to technology advancements.
- Search ~ Anyone can sell. Anyone can publish. Anyone can help me find it. The choices are almost overwhelming. Take your pick.
How are you tapping into the game changing marketing opportunity? Are you fast enough, responsive enough?
Trend 4 ~ Increasing computer power drives changes in human behavior: Increased computer power is increasing the emphasis on productivity. You can do more with less and move forward and exploit new opportunities faster due to technology advances.
What product or services could you add that you could not deliver yesterday?
Trend 5 ~ I AM THE OFFICE: Computing is changing our life. About 12% of people have smart phones (it was about half at the meeting but that was a tech crowd). Information and communications are available everywhere. The Apple iPhone interface will start revolution in usable mobile computing devices. Video/web-conferencing is becoming a usable reality. As travel becomes more expensive we should be rethinking how we communicate.
Japan is the first country to see a reduction in PC purchases in favor of mobile devices. More than 1/2 people on earth have cell phones. Over 80% in US have cell phones. Unified communications are putting the office in your pocket.
Have you taken advantage of "mobility" as a corporate strategy?
Trend 6 ~ Consumer electronics spending dominated by HDTV and convergence.
Berkus recently attended the Consumer Electronics Show in Las Vegas. His observations:
- He felt that the connected digital home and HD video are the primary trends. Digital TV was 56% of US TV's in December 2007. In February 2009 that number will go to over 80%.
- 250 million computers sold worldwide. Intel is working on a 10x performance at 1/10 the power.
- Gaming leads with US software sales of $7.8B in 2008 exceeding US Box office receipts of 2005.
- Wireless electric charging of CE devices creating wireless power through the air. Will be recharging devices wireless through the air. Intel is working on this so it is not as far away as you might think.
- Digital home entertainment servers centralize content acquisition and storage. You can be the source of the entertainment by creating your own entertainment and bring people/family from around the world into your home.
- IP-TV and WIFI phones are a real and growing segment. Devices will be driven by voice and movement.
What is your company doing to exceed the expectations of the newly-sophisticated consumers?
Trend 7 ~ Web 2.0 enters the mainstream: I loved this one because this is where I'm at now. Someone asked me today how we were able to handle all of the web 2.0 stuff we are doing and still develop programs and meet the needs of our clients. It is now part of our culture in the SBDC. For your company young people familiar with social networking that are entering workforce and will drive widespread deployment. Business MUST adapt. IT departments will have to decide how to deal with this in relation to their firewall. Facebook is a platform now. Facebook has 55 million users and since May 24, 2007 with the launch of open API over 18,000 applications have been developed.
How can your organization better communicate using these tools?
Trend 8 ~Web 3.0 - 4.0 / way beyond search: Berkus discussed the next wave of the Web.
- Web 3.0: the Semantic or natural language Web: Attached meta-data to information stored on the Web will create a rich card catalog on top of data. The computer will want to interpret what you ask in order to give you better results.
- Web 4.0: The Ubiquitous Web: Conducting intelligence in to smart networks. Intelligent networks communicating with other intelligence networks. You and I will give up a variety of our tasks to these new assistants.
Does your company's marketing message provide meaning not just words?
Trend 9 ~Everything turns green: While innovation and computing demand are providing unparalleled advances, it is also driving increased energy consumption. Energy required to power and drive the new advances will have to be addressed in an environmentally sustainable way.
What initiatives have you undertaken to "green" the economy?
Trend 10 ~The CIO becomes the Business Strategist: As Information technology (IT) becomes increasingly important to success of organizations the Chief Information Officer (CIO) will become a major player in developing business strategy. Data mining is becoming critical to business success. The CIO will determine how to invest capital more effectively to reduce cost, improve productivity and achieve corporate objectives. IT must embrace the new realities of business and corporate leadership must accept the new roll of IT in business strategy.
How are you adapting to the new reality of business strategy?
(Image source: Masternewmedia.org)
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