Making Snapchat Facebook Takeover Proof

Partner, Sensei Marketing
Partner, Sensei Marketing

Sales & marketing veteran with almost 30 years’ experience and now 1800 digital projects to his credit for clients including Morgan Stanley, AOL, Hyatt Gaming Management, Snyder's of Hanover, Hitachi, the Home Depot, Kraft Foods, Drees Homes, American Idol, and hundreds more, including leading agencies around the North America.     ...

Read more

1

Facebook, the social media juggernaut, seems intent on swallowing up any social media network that poses a threat to its soon-to-be monopoly over the world’s mindshare.

Facebook is a precursor to The Borg: Assimilating competitive networks until all that’s left is one large, ubiquitous social network.

Facebook Acquires Instagram, Assimilates Audience Data

Facebook acquired Instagram, the mobile-focused image sharing network popular among a younger audience because its demographic (Millennials) were slowly but surely leaving Facebook, which they saw as their parent’s social media.

Adding Instagram to its roster of companies was smart as it allows Facebook to combine data analysis and sell advertising to a wider range of businesses.

Facebook Clones Google Plus’s Best Features

Not even the mighty Google could not depose Facebook of its reign. Google Plus, it’s failed attempt to compete with Facebook, had the right concept and, some will argue, a more intuitive and robust network.

The problem was, it could not create a unique differentiator that Facebook could not duplicate, and do better. Unable to buy Google, Facebook cloned the Google Plus services we loved and in a very surgically way, made Google Plus redundant.

Google Plus offered a few differentiators, including hangouts, real-time chat, and “groups.” So, Facebook introduced Messenger to provide real-time chat and video chat and expanded its Business Pages format to offer a Google Plus-comparable groups function.

Further, it updated our ability to manage our network by adding a “friends category” function so we can group and share content with sub-sets of our followers, just like Google Plus’s Groups.

Facebook-owned the market; there was no longer a need for people to waste time building out a community on another network to access those services. It rolled over Google Plus.

Facebook Assimilates Whatsapp

Whatsapp, the digital messaging platform was a real competitor for Facebook’s continuing push to become a mobile platform. Facebook had Messenger, which it could have further developed into a “Whatsapp Killer” but Whatsapp’s ability to replace text messaging was a service that Facebook’s Messenger could never provide. Instead of cloning the service, it purchased Whatsapp.

Facebook & Instagram Clones Vine and Periscope Live Video Services  

Twitter took a stab at Facebook’s dominance with the introduction of the Vine and Periscope networks, which quickly grew in popularity among younger audiences seeking to become content producers, influencers, and receive more entertainment value from their social exchanges. And it worked, for a time.

Instagram’s video service crushed vine, and Periscope was taken out by Facebook’s introduction of Facebook Live, among other execution issues by Twitter.  Facebook’s cloning strategy beat them at their own game.

So who’s next?

Twitter? I don’t think so. Despite the “Trump Effect,” which has driven fans to the network to hang on his every word, and detractors to gawk at the train wreck, Twitter’s been relegated to a niche play.

Twitter’s value to advertisers is diminished – and has possibly become toxic – due to the platforms “too little too late” effort to control trolling and hate speech on the network. Advertisers are running, and potential buyers are following suit.

Still, there’s something Snapchat can learn from Twitter. The challenge is can it remain Facebook-proof but not become a niche network?

Can Snapchat Beat The Odds?

Snapchat, through its parent Snap, recently launched an IPO and is the next challenger for the attention – and dollars – of advertisers and marketers.

Despite the success of its initial IPO, some believe Snapchat is the believe Snapchat is the heir apparent for Facebook’s next takeover. The question, in my opinion, is not if, it’s how?

Will Facebook acquire Snapchat the way it did Instagram? Or, will it simply clone the technologies that make Snapchat appealing to younger audiences, starving the growing network’s growth of digital oxygen like it did with Vine?

If the writing is on the wall, what’s Snapchat to do to grow? Or remain relevant? Or stay in business, for that matter?

It does seem that there’s no beating Facebook, which has innovated, spent, and cloned its way to an omnipotent social media juggernaut. Can Snapchat survive the inevitable takedown by Facebook?

The solution is not technological.

The One Thing Facebook Cannot Do

Snapchat will never beat Facebook. Facebook has proven it will buy or clone what it wants, assimilating and cloning technologies. Its only chance to remain independent and a competitor to Facebook’s advertising prowess is to do the one thing that Facebook cannot: Stay relevant to younger audiences.

The Millennial generation has proven they do not want to be a member of their “parent’s social network.” Now that Boomers have become digitally savvy themselves, Millennials – and each generation after them – will always jump to newer, hipper, and sexier networks. Any network their parents join will become instantly irrelevant.

Facebook may clone Snapchat’s self-destructing social post model, or it may just buy the network, but that will just send the next generation in search of a social channel of their own.

Snapchat has an opportunity to beat the odds but staking a claim on the official “voice of the next generation.”   In other words, Snapchat could be the first one to beat Facebook at its own game: Buy and clone new technologies and channels relevant to younger audiences, driving a bigger wedge between what’s hip and “my parent’s social networks.”

Doing so could replicate Apple’s success in becoming a cultural brand rather than a product or technology. Becoming the “cultural voice of a generation” would render it toxic to a Facebook takeover.

Just imagine Apple being purchased by Microsoft. What would that do to Apple’s cache among its core audience? Would they continue to be as blindly loyal and fanatic – even if the technology didn’t change – if owned by Microsoft? Of course not.

In the same vein, Snapchat has a chance to make itself toxic to predators.

Will it?

The post Making Snapchat Facebook Takeover Proof appeared first on http://www.senseimarketing.com.

Marketing Transformation Next-Generation Customer Experience Sales Marketing meta Marketing B2B B2C CX Customer Experience EX Employee Experience AI ML Generative AI Analytics Automation Cloud Digital Transformation Disruptive Technology Growth eCommerce Enterprise Software Next Gen Apps Social Customer Service Content Management Collaboration Chief Marketing Officer

Memory is the Barrier Between Computers and Humans

1

Title: Understanding the Four Types of #AI

Source: Twitter, via Vala Afshar

Link: https://theconversation.com/understanding-the-four-types-of-ai-from-reactive-robots-to-self-aware-beings-67616

We need to do more than teach machines to learn. We need to overcome the boundaries that define the four different types of artificial intelligence, the barriers that separate machines from us – and us from them.

My Impressions: I often marvel at the attempts from Hollywood to portray AI as a foregone conclusion of using computers, and how simple it is to do things if you are a computer.  My favorite depiction continues to be the Star Trek computer – if you ever worked in AI you know how far we are from something like that… but I digress.

I often find myself having the debate on whether that model will become reality, whether the singularity is possible, and how we get there.  While most people get hung on feelings and emotions as the differentiating factor between us and them, I favor what I call the three I’s (feelings and emotions can be recognized, measured, and replicated — the key is to identify the few variables that affect them – like sarcasm, but we can talk about that some other time).

The three I’s are Intuition, Innovation, and Imagination; they are not measurable or easy to replicate (yet).  As I often use as an example – Monsieur Fleming would’ve never found penicillin with the search parameters her was using if he was a computer.  It’s a fungus growing on food — not sure how to tell a computer to test that (especially since they would not bring their lunch, where the mold would grow on).

This article goes one further examining how the real barrier between computers and people is memories – and how they work.  If you think about it, the most complex process we have as humans is memory, not emotions.  What, how, where, and why something is stored, recalled, blocked, used, or discarded is far more complex that crying when you see a commercial with puppies (not that I do that, but I’ve been told some of you do).

Read this article so you can see what are the major challenges we have to focus on, not for advanced analytics only (although the ability to hold a conversation that is coherent requires memory) but for machine learning.

Good stuff…

Data to Decisions Next-Generation Customer Experience Innovation & Product-led Growth Future of Work Tech Optimization Digital Safety, Privacy & Cybersecurity ML Machine Learning LLMs Agentic AI Generative AI AI Analytics Automation business Marketing SaaS PaaS IaaS Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP finance Healthcare Customer Service Content Management Collaboration Chief Customer Officer Chief Executive Officer Chief Information Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

Microsoft aims to be a strategic business partner in digital transformation - Digital Difference New York 2017

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

Read more

When most organizations think of Microsoft, they still think first of PCs, Windows, and Microsoft Office. They often don't fully perceive the fast-growing cloud juggernaut of today, replete with the very latest enterprise technology capabilities such as their rapidly evolving suite of Internet of Things solutions, industry cloud solutions, or growing machine learning capabilties. Nor do they regard Microsoft as a likely strategic digital business partner to help them fully reach their digital potential.

However, given that the global value of the digital growth in the next decade is estimated at a sobering $8 trillion in additional commercial value creation ($28 trillion in total new economic output, of which 28% or so is digital), today's tech giants have a newfound sense of their economic influence, even their ability to shape corporate destiny using sophisticated and powerful new digital business capabilities. Not surprisingly, these vendors seek to claim their role in this unfolding saga, and even help write history a bit along the way.

Microsoft clearly senses this historic inflection point and would like to be perceived as a top player. Thus the computing giant is currently in the process of trying diligently to change the perception of the organization as a vital enterprise-class business partner, not just another big technology vendor. As part of this ongoing effort, I was invited last week to attend their Digital Difference event, an invite-only confab at the historic Cedar Lake event center in West Chelsea, where they showcased in a carefully staged and well-orchestrated half-day session how they have expanded  "up to the stack" to help some of the world's leading organizations digitally transform their businesses.

Hosted by Abbie Lundberg of Harvard Business Review's Analytics Services, who was also joined on stage by Microsoft's Judson Althoff, who is Executive Vice President, Worldwide Commercial Business at Microsoft, the company's perspective at the event was quite clear: 1) Companies have been underestimating the urgency and scope of digital transformation and can no longer put it off. 2) They must find ways to realize their digital potential, not just to thrive, but to survive, and that 3) Microsoft has had a growing role in partnering with large enterprises at the most strategic level to help them plan and executive on their digital future. It was this last part which was the main objective of the event.

Harvard's Abbie Lundberg, Microsoft's Judson Althoff, and La Liga executives at Microsoft Digital Difference in New York on April. Photo Credit: Dion Hinchcliffe

Throughout the event and quite commendably from my point of view, Microsoft was intent on demonstrating real proof points of their work with respected large brands, instead of just providing marketing soundbites on the importance and urgency of digital change. For me, the key customer stories I witnessed at Digital Difference were:

• Maesk's move to a cloud-based Internet of Things logistics solution. The storied shipping company's Chief Digital Officer, Gocken Ibahim, was on hand during the main morning stage session, touting their strategic partnership Microsoft as they seek to more fully integrate their existing transport and logistics units while developing a more modern digital incarnation of their various lines of business. "We're moving from a projects company, to a products company," said Gocken, repeating a mantra that has emanted almost as a tagline from Silicon Valley of late as everyone seeks to productize their business for the digital world. Maerk said they see large opportunities for efficiencies at scale, which repeatedly came up in the discussions of Maerk's shift to Microsoft's IoT capabilities. Microsoft's IoT cloud solutions gives them the ability to track and share material, capital, and data as needed so that products can be built, shipped, and managed seamlessly across Maerk's logistics channels from manufacturer to wholesaler to retailer to customer, using live data feeds and machine learning insights to minimize exception scenarios and waste.
• Soccer giant La Liga's use of cloud data to personalize engagement with hundreds of millions of fans. Often touted as the the world’s top soccer league, La Liga has long had its hands full helping its 1.6 billion fans fully engage with the sport and watch its 42 teams play. Now they are using Microsoft cloud services and artificial intellgience solutions to "to truly personalize fan interactions. Fans can specify their rooting interests then access only the most relevant content, including videos that reflect their preferences, or stats on their favorite teams or players. Via various digital channels, fans can connect with other La Liga backers worldwide, creating interconnected communities." Thus LaLiga is digitally transforming by giving fans better digital experiences that are they can use to induge their passion for the game and better connect to their favorite clubs and players. Country Manager Raul Gonzalez, a world famous famous ex-player in his own right, was on hand at Digital Difference explaining that social media had simultaneously made it possible for them to connect with their fans 1:1 like never before, but that it was also an enormous challenge in terms of engagement of scale and data-based customization. They utlimately felt Microsoft was best equipped to help them deal with and LaLiga in fact, launched their new digital experience for fans at the event as well.
• Hershey's use of machine learning to optimize their factory operations. After the main stage event, I headed out to elaborate showcase area, where I encountered several good stories. Hershey's was one of the most detailed real-world examples of machine learning that I saw at Digital Difference. Efficiently using ingredents when they make their products, Twizzlers in this case, has been an exercise in managing many degrees of variability. The Hershey factory workers that make their well-known candy often have decades of experience making them, but dozens of manufacuring variables can confound the process. These variables, many of which change in real-time, such as the temperature of the raw ingredients, make it very hard to optimally produce a high quality product with as little waste as possible. Hershey has been using Microsoft Azure's machine learning capabilities on their Twizzlers product line to predict ahead of time when changes to manufacturing variables are going to impact the product and provide insight with enough time to use it. Hershey had actual, hard data on display to show how predictive machine learning help drive real efficiencies.

Numerous other enterprises had booths at Digital Difference as well, and most of the stories were interesting, if earlier stage than the examples above. Interestingly, Microsoft's Hololens was on prominent display and I had a chance to use one for the first time to view building models that architecture firm Trimble and Gensler used to visualize initial designs for customers, and was a compelling vision for the future of that industry. Microsoft's Connected Car was on the showcase floor as well, and was a popular attraction.

Finally, I was able to sit down with Microsoft's Judson Althoff personally to have a one-on-one conversation about how Microsoft is thinking about how best to work strategically with the customers on digital transformation of their business. Judson noted that the "world of customers becoming much more digital" and that what enterprises often don't understand is that it becomes "an order of magnitude more complex to deal with digital scenarios", which is why technologies like machine learning (to handle the volume and combinatorics) is critical to future digital solutions and customer experiences. Judson also had a mantra he repeated several times during the day, which is that "your systems can only be as good as the data over which it reasons." This insight combined with overall "underestimation of what it really means to be digital" has led Microsoft to work with customers on "four categories of deep dive questions that we take our customers through." Namely, asking them if they are truly digitally transforming their "a) customer engagement b) employee empowerment c) optimization of operations, and d) product transformation."

At the end of the day, the result of this work with customers -- typically encompassing Iot, data, and intelligence -- should "turn them into a digital ecosystem," Judson told me. By doing this well, the total addressable market (TAM) for Microsoft becomes far greater than total number of servers and PCs, but essentially all business activity, greatly increasing the market potential for Microsoft to grow and have impact, he noted. I believe this last point is one of the key motivators for Microsoft to become a strategic business partner, instead of a "just" major technology vendor.

My Analysis

There is little question that Microsoft has the skills and delivery capability in terms of a global cloud presence that truly understands the the technology needs of the world's largest organizations. Now the hard work is about crossing over to the business side of the digital conversation. Microsoft's proof points on strategic digital partnership certainly represented some large, well-known enterprise names, and they were able to get several of these organizations to say very encouraging things about their digital partnership so far. However, only Hershey was on hand -- at least in my conversations at Digital Difference -- with hard data it could show that the result had real business impact. So the other half of the equation, the business side where Microsoft provides business guidance based on the art of the possible with digital today, is something that's going to take more sustained storytelling over the next few years.

That said, I don't have much doubt, however, that Microsoft can grow and become a competitor with the Accenture Digitals and Deloitte's in this space. In the end, for them to fully deliver on the vision of enterprise digital empowerment that Microsoft was conveying at Digital Difference will require repeated and sustained evidence like this. Business leaders, particularly the CEO, must receive a steady and very clear sense that Microsoft belongs at the strategic planning table in the boardroom as an equal partner -- as much as it has crediblity in the office of the CIO today -- in terms of fully designing the long-term digital future of organizations. Microsoft made a good down payment against this vision at Digital Difference and I hope they continue the ongoing effort, as it was a painstaking-produced and high quality event that should help further their objectives in this regard.

Relevant Links

Microsoft Digital Difference

Harvard Business Review report: The Digital Transformation of Business

Microsoft Azure

New C-Suite Innovation & Product-led Growth Event Report Microsoft Executive Events Chief Customer Officer Chief Executive Officer Chief Information Officer Chief Marketing Officer Chief Digital Officer

Red Hat Summit 2017 Event Report

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

Read more

We had the opportunity to attend Red Hats yearly user conference Red Hat Summit in Boston, held May 2nd till 4th 2017, at the Boston Convention Center. The conference was well attended with over 6000 attendees, a new record for Red Hat. In its 13th edition, I took note of the international customer base, reflected also in the Red Hat innovation awards. 

 

 

So, take a look at my musings on the event here: (if the video doesn’t show up, check here)
 

No time to watch – here is the 1-2 slide condensation (if the slide doesn’t show up, check here):

 

 

Event Report - Red Hat Summit 2017 - The New Kids on the Block are thriving from Holger Mueller

Want to read on? 

 

Here you go: Always tough to pick the takeaways – but here are my Top 3:

Partnership with AWS. The big news of Day #2 was the Red Hat partnership with AWS, freshly put into action, so details were a little sparse. But effectively, Red Hat is looking to give its customers more software capabilities through making it easier to them to administer, launch and use 3rd party software capabilities, in this case AWS. It all happens through Red Hat OpenShift Container Platform, its PaaS platform. In the Day #2 keynote we saw a joint demo in which an OpenShift based JBoss server got access to an AWS RDS database, all provisioned from Red Hat OpenShift. Red Hat customers will not only be able to configure and deploy AWS services from the OpenShift version running on AWS, but also from an OpenShift deployment that runs on premises, on their very own servers. The targeted AWS products are Amazon Aurora, Amazon Redshift, Amazon EMR, Amazon Athena, Amazon CloudFront, Amazon Route 53, and Elastic Load Balancing. No surprise – a data base centric range. What Red Hat customers gain from this partnership will be the access to new capabilities that they could only deploy with substantial cost inside of OpenShift (especially on premises), take e.g. Hadoop / BigData use cases enabled now by Amazon AMR. Effectively Red Hat protects software assets that customers have created inside of OpenShift and gives them a future with adding / expanding use cases. And AWS gets access to enterprise load, while extending the reach of AWS products to …. On premises deployments and load. Something that could not have been done so far, as it was always ‘all in’ and building on AWS or migrating to AWS. Lastly on the Linux side, Red Hat and AWS will work together to expose more AWS services directly to RHEL, this will help customers who want to bring RHEL based applications to AWS, staying on Linux. And on the JBoss side both vendors will work together to provide JBoss as a containerized application on AWS. It all is planned to go live in fall of 2017. ReInvent timeframe maybe? 

 

Whitehurst on the opportunity ahead for Red Hat

Red Hat OpenShift.io unveiled – The years are over when new IDEs are unveiled, but every now and then a new effort is announced, here it was OpenShift.io. IDEs are important for developer productivity, and quickly become the ‘living room’ of a developer, as such they have tremendous ‘stickiness’. Red Hat felt compelled to provide a modern, container (of course Kubernetes based) new IDE. Of course, it leverages Open Source IDE ingredients, such as Jenkins, fabric8 and Eclipse Che. More tooling is available for Workspace Management (shown in demos), better (of course agile) planning, team collaboration, coding and testing and of course CI / CD. I was impressed by the real-time Stack Analysis capabilities and plans – but that was to be expected from a multiple ISO layer owning technology stack vendor like Red Hat. And unsurprisingly it is ‘free’ in the sense of being part of the Developer Program and now in developer preview, developers can find it at https://openshift.io.

 

Cormier on the Red Hat Model

The New Kids on the Block are doing well. Red Hat is the largest Linux and Open Source company with revenues north of 2B US$. But with the threat of public cloud lingering over all on premises deployments, it is questionable how long Red Hat can derive revenues from Red Hat Enterprise Linux (RHEL). It’s remarkable the vendor is still growing this revenue segment with 10-20% growth, nonetheless it will slow down, maybe even come to a screeching halt. Red Hat knows this and has another revenue stream around JBoss, but that is equally heavily on premises centric, but growing relatively faster. So, longer term revenue growth and customer appeal for Red Hat must come from the newer products, the new kids on the block: OpenShift, OpenStack related services. Encouragingly these are growing at 100% now, but the small scale of a combined 100M US$ is still way too small to carry Red Hat as the 10k+ employee software vendor that it is right now. Speed of product development, acceptance by customers and loyalty of customers will be key. On the new capabilities, Red Hat has done well, it now needs to get customers to adopt the solution. It needs to change the conversation from administrators of server and services to the CxOs who make platform decisions. Not an easy task. But you need to have the products first.

 

The Red Hat Product Portfolio

 

MyPOV

A good event for Red Hat customers. An interesting selection of topics for the keynotes – it was not yet about the new offerings, at the same time the largest Linux vendor did not show a roadmap / planned capabilities for RHEL, a surprise. We heard ‘Containers are Linux’ a lot of times, but in the public cloud it doesn’t matter what they run on. Customers care for SLAs, not for operating systems. And we heard a lot of pledges to Open Source – but everybody is using Open Source these days, Open Source has won, they question what Red Hat does better and different than the other players would be interesting to hear. The direction of multi-cloud is the right one, as we have seen from the success of other multi-cloud offerings, most prominently CloudFoundry. The question will be how much net new load Red Hat can attract for next generation application use cases – running in the (public) cloud, vs. existing RHEL and JBoss based load ‘just’ migrating to the cloud.

On the concern side, Red Hat maybe running out of runway. The fact that all Innovation Award winners were not US based is a surprise for a US based event (yes Rackspace as a partner announcement is a US based vendors, but partner awards are always …. somewhat political). Compare that to the 2015 innovation award – where all winners were US based, except for one, Avianca. Public cloud adoption outside of the US is lagging, amongst many reasons largely because of the absence of public cloud vendor data centers. Consequently, enterprises hold on to older, proven best practices to run their enterprise loads. Likewise, an exposure to government customers (State of Jalisco, British Columbia, Singapore Govtech) gives room to highly beneficial use cases, but governments are in general not aggressive technology adopters. A trend to watch, possibly a fluke, maybe not.

But for now, Red Hat is doing well, passionate customers and employees were all in the direction of the conference, which was about the individual making the different. But in developer terms, the individual needs the right tools (Red Hat provides Openshift.io), and platforms that provide portability in times of uncertainty (Red Hat offers OpenShift Container Platform) and offer attractive functionalities (the partnership with AWS comes to mind). So, good progress by Red Hat in the age of (public) cloud transformation of enterprise workloads. Stay tuned.

Want to learn more? Checkout the Storify of Day #1 collection below (if it doesn’t show up – check here). And checkout the Analyst Day Storify here. And Day #2 here. And I had 10 Questions for Red Hat - see here.

 

 

Tech Optimization Innovation & Product-led Growth Next-Generation Customer Experience Data to Decisions Future of Work Event Report Executive Events SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Executive Officer

Digital Business Distributed Business and Technology Models Part 5; Business Apps and Services

Andy Mulholland

Vice President and Principal Analyst, Constellation Research
Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

Read more

The Digital Economy will consist of ecosystems participating in interactions from which multiple participants benefit. On route to this new market, most established Enterprises look to add Digital Technology to enhance their current Business model. However, unrecognized competitors in the form of startups are already establishing new Business ecosystems around Smart Services. This series started by defining a Digital Enterprise as an operating business in Part 1, and continued by exploring the technology frame work to deliver this in Parts 2,3a, 3b and 4. In this the concluding, Part 5, a real example is used to illustrate exactly how one, of the many, small startups is quietly creating a Digital Ecosystem around a new set of Smart Services in an established market.

IOTAS, a real company with the tag line ‘Smart Apartment made easy’, is creating a distributed Digital Business model integrating Landlords, Renters, Building Services, and Utility companies into a mutually beneficial Digital ecosystem. In the past all these participants had individual relationships operating in isolation, often under duress, when required by events. IOTAS ‘Smart Apartments’ proposition introduces a new Digital Business and Technology model built round an ecosystem.

Normally case studies on IoT and Digital Business feature established companies who have added Digital capabilities to extend their existing business model. The use of IOTAS as an example is to emphasis how well funded standups are quietly, often almost invisibly, creating new Digital Business models and business ecosystems. Many of these companies are not recognized as competitors simply because they don’t attack using the current business model, but instead look for the ‘white spaces’ between existing business models.

Some years ago in a Harvard Business Review article the following definition was used to describe the then popular term of White Space; “market opportunities your company may wish — or need — to pursue that it cannot address unless it develops a new business model.” Today this is definition absolutely fits these new market players’ moves.

To some Uber is seen as a one off exception to normal business exploiting a lucky fluke market condition, but as IOTAS and others demonstrate this is simply not true. By attacking the White Space between existing business models these new startup companies can build substantial positions before existing Enterprises even become aware of their presence as competitors or disruptors.

These new Digital Economy players aim to isolate the sales route to the existing market suppliers and introduce themselves as a market intermediary. This is not new; Amazon has been exploiting this strategy for many years, what has changed is consumer acceptance, plus the abilities of IoT coupled with AI over Clouds, Apps and Services to deliver. (The technologies of CAAST; Cloud, Apps, AI, Services & Things).

All successful established Enterprises should be monitoring at least three startups that are aiming to enter and disrupt some element of their market to increase their understanding of Digital Business models. It is easy to find these startups by the specialized listing companies that maintain records of Venture Capital investments and success rates.

IOTAS targets the rented apartment market in the USA, selling the capability to deploy ‘Smart Apartments’ as a commercial value proposition to Landlords as the buyer. The proposition creates an Digital Business ecosystem by providing clear value benefits to four different communities; Landlords, Renters, Building Maintenance and Utilities. IOTAS also takes advantage of a change in consumer attitudes to Lifestyle choices created by Digital Technology. The US rental market is continuously growing while home ownership rates have steadily fallen since a high in 2006. Ten years later in 2016 according to market research 13.6% of renters, approximately 5.5 million people, could afford to buy, but chose to rent to facilitate their lifestyle.

This shift is inline with similar behavior changes in other markets as the ‘Service’ economy grows around a new ‘Digital’ generation who has adopted new ‘flexible’ lifestyles. The ‘Digital Lifestyle” renter will pay a premium for an apartment that supports this lifestyle requiring not just a fast Internet connection and WiFi, but the additional lifestyle features of a Smart Apartment.

IOTAS provides Landlords with a complete package for each rental building that combines making individual apartments ‘smart’ for the renter with the increased operational benefits of a Smart Building for the Landlord. Renters gain the ability to ‘tailor’ the apartment facilities, plus gaining an IOTAS transportable profile that they can reassign to their next rental apartment. (Subject to their new landlord offering an IOTAS Smart Apartment deployment).

In addition to gaining a market differentiation plus premium pricing the Landlord also gains the advantages of reduced operating costs from using Smart Building management. IoT based sensing to improve proactive fault identification and automate maintenance responses, as well energy utilization control all increase the benefits.

The IOTAS approach brings Renters, Landlords, Building Maintenance Contractors and Utilities together in a Business Ecosystem, providing each with direct benefits from the relationship. It is important to recognize that existing traditional Business relationships to manage apartments and provide supporting services will be changed and new competitive pressures introduced.

The diagram below illustrates the four layers of the Framework developed in this series, but with the top layer illustrating the IOTAS Digital Ecosystem. (A summary of the four layers is provided at the end of this blog). There will be multiple ecosystems present and not all will be separate from each other, a building maintenance company could well be present in multiple ecosystems.

The obvious question is why start the definition of Business Apps and Services layer with Ecosystems? The answer lies in the difference between the Digital Economy and the Web Economy. The Digital Economy supports interactive ‘read’ and dynamic optimization of ‘respond’ to events, (consider Uber), amongst participating members of the ecosystem, (Taxi drivers, passengers, hotels, restaurants, etc.). In contrast an Enterprise Web site publishes static ‘forms’ to provide data entry into a constant and unchanging processing application.

A Smart Service, as opposed to a Web Service, achieves its interactive and responsive capability by orchestrating participants who have chosen to belong to its ecosystem. This is achieved both by its functionally valuable ‘Business’ Apps, and Services, as well as by its enabling ‘platform’ that provides both Technology Part 3a and Business Part 3b Distributed Services.

This leads to the question as to why different between an App, and a Service? In Business terms, as opposed to the more complex technology definitions, an App defines a Business function that is totally under the control of one Enterprise. A Service on the other hand is an orchestration of Business functions derived from multiple Enterprises and creates interdependencies. The IOTAS user App with IOTAS platform provides a Renter with Smart Apartment control in a closed bundled solution. To create a Smart Building requires the integration of products and online services from multiple vendors with the resulting interdependencies. The business benefits delivered are high for the Ecosystem integrator, as is the potential for improved customer relationships.

The downloadable IOTAS Smart Phone App provides each renter with individual Smart Apartment management through the IOTAS Apartment Building Platform. IOTAS provides a fully functioning solution using its proprietary products, and is fully responsible and accountable for the reliable operation and maintenance of App. As is usually the case with Apps all, or a majority, of the Service revenues belong to IOTAS.

The IOTAS platform is a capability that can be integrated into the Smart Building deployment, alongside Building Infrastructure Management, (BIM), Utility Smart Meters, and other IoT sensed Services. The Business beneficiary of the Smart Building, (apartment block), is the landlord seeking to both reduce the cost of operating the building as well as improving the efficiently by integrating the ecosystem of providers.

Smart Building management represents a further level of Digital Business ecosystems and for this, and again a real example, Honeywell, a tradition market leader, provides an illustration. Increased use of IoT sensing, on board digital processing in products, such as Heating and Ventilation units, combined with intelligent building control systems have resulted in Smart Buildings becoming a recognized market place. Honeywell has moved to introduce new ‘intelligent’ versions of its products as well as adding an extension of its Business model to become a Smart Building ‘Integrator’ around its EBI 500 platform.

First mover Enterprises in a range of Industry sectors, (John Deere is often used as an example), have moved to create and control an ecosystem of smaller and more specialized suppliers. In the Smart Apartment block building Honeywell can become the ‘master’ building ecosystem provider making IOTAS a member of the Honeywell Smart Building ecosystem of partners.

App providers of unique, innovative, high value specialized business add to the business value of the overall Ecosystem of solutions. Those Enterprises that can become Ecosystem owners reinforce their current positions, extend their competitive value and differentiation, as well as gain new revenue sources from their ecosystem partners.

The sources, types and amounts of data produced by these ecosystems provides the game changing inputs to Augmented Intelligence capabilities outlined in Part 4, and summarized at the end of this blog. Continuous optimization of operations becomes possible to produce the Digital Enterprise as outlined in Part 1.

The two examples; IOTAS and Honeywell, were selected to illustrate the contrast between two different approaches that are creating Digital markets; IOTAS an innovative startup creating a Digital market and Ecosystem that has not previously existed through an App; and Honeywell an established vendor repositioning to become a Digital Marketplace of Services supported by an Ecosystem of both existing vendors plus startup vendors.

Though there are common elements with the second Digital Business models, there is a third model based purely on providing ‘Service Orchestration’. As with the first two there has to be an enabling product, a big part of the difference is that it is usually, but not always, as part of the enabling Distributed Services Technology or Business layers. These Enterprises aiming to satisfy a new and emerging market for Digital Services fall into four distinctive groups, and these are explored in the next blog entitled ‘Four IoT Business models’. Once again the defining feature, as with all Digital Market places, is the creation and operation of an Ecosystem.

The combination of the Digital representation of assets and events, with the interaction between members of an ecosystem, produces not just more data, but new, previously not available, new types of context. This provides both the input and the demand for a very different form of output, both in time frames and in ability to be turned into optimized reactions. The capabilities and role of Intelligence leading into Augmented Intelligence or AI is outlined in Part 4.

The coupling between the Business Apps, and Services, with the use of Augmented Intelligence is the focal point that technology vendors are targeting, and will be the driving force for new levels of Enterprise competitive operation of their own Business, as much as those of the Digital Market place. See The Digital Enterprise Business model defined in Part 1 of this series.

 

Summary; Background to this series

This is third part in a series on Digital Business and the Technology required to support the ability of an Enterprise to do Digital Business. An explanation for the adoption of a simple definition shown in the diagram below to classify the technology requirements rather than attempt any form of conventional detailed Architecture is provided, together with a fuller explanation of the Business requirements.

 

 

 

 

Part One - Digital Business Distributed Business and Technology Models;

Understanding the Business Operating Model

Part Two - Digital Business Distributed Business and Technology Models;

The Dynamic Infrastructure

Part Three – Digital Business Distributed Business and Technology Models

1. Distributed Services Technology Management Distributed Services Business Management

Part Four – Digital Business Distributed Business and Technology Models

Augmented Intelligence and Machine Learning

New C-Suite Data to Decisions Future of Work Innovation & Product-led Growth Tech Optimization AI ML Machine Learning LLMs Agentic AI Generative AI Analytics Automation B2B B2C CX EX Employee Experience HR HCM business Marketing SaaS PaaS IaaS Supply Chain Growth Cloud Digital Transformation Disruptive Technology eCommerce Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP Leadership finance Customer Service Content Management Collaboration M&A Enterprise Service Chief Information Officer Chief Technology Officer Chief Digital Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Executive Officer Chief Operating Officer