The latest earnings reports from many major IT companies had one common thread- they are all under-performing in their core business. And, all of them, are betting their future on the Internet of Things (IoT).
Microsoft, IBM, Intel et al fall into this camp.
In her latest newsletter, Stacey Higginbotham had this to say:
What’s shocking about these stories is how most of the people leading these organizations saw the future coming. But what’s happening as disruptions come fast and furious is that it is hard for a big company to turn on a dime, and it may be impossible for them to deliver the margins they once did. It’s not just that they may move more slowly, it’s that their incentives may not align. Or maybe it’s that the skill sets they’ve nurtured in employees are all wrong.
Starts with IT companies
This is what technology step change looks like.
IT majors are the first to try and fundamentally re-architect and reorient themselves to the future they see coming. Exactly the same thing happened with cloud computing a decade ago. So much so that the term of ridicule cloud washing was coined for those who dressed up their old world offerings as cloud services.
Will “IoT washing” be a thing?
Then the Others Follow
The history of cloud computing shows how IT majors are only the first cab off the rank. They are gearing up to serve and profit from everyone else beginning their own transformation journey.
As I’ve said previously, just as the Internet enabled disruptive innovation of digital industries such as communications and entertainment, the Internet of Things will rapidly change physical industries such as manufacturing, infrastructure, agriculture, environmental, etc.
Every company operating in physical industries is going to be transformed in the coming years by the Internet of Things. Every one of them needs to understand the coming changes and how they will re-architect their respective industries. Then they have a choice- so what are we going to do about it?
There are, however, pioneer companies who totally and absolutely commit their companies to the future they see coming. Translating commitment into fundamental change is so hard that few will be able to do it. My pick for one which will is GE.
Two articles that capture some of the industrial giant’s transformation are How GE will bring the Industrial IoT to life and Behind GE’s Vision For The Industrial Internet Of Things.
To finish off, here’s Stacey again:
The transition to a world where everything is connected and data is delivered on the cheap isn’t only going to affect traditional tech companies… this is a shift that will hit every company. Regulation and legacy infrastructure in some industries will slow the change, but it won’t eliminate it. This shift will throw more companies into competition, which drives margins down further, especially for companies that are devoting resources to trying to innovate and keep a legacy business alive. Everyone is trying to become a platform and not all of them will succeed.