Explosion in the adoption of Social and Mobile applications and technology will present a major shift for businesses going forward as they adjust to the new channels of demand from both a customer and employee perspective. Traditional ways of communicating and connecting within organisations are quickly being overtaken by a changing need and expectation of the users involved providing both challenges and opportunity ahead. Companies with rigid and static business models will find it difficult to adjust, to this expectation, where others with lean and agile business models will be able to take advantage of the many opportunities ahead.
In the evolution of the digital age there have been four significant shifts in technology architecture, first there was the mainframe followed by the minicomputer then client/server and more recently the internet. Each new advance provided around a decades worth of improvement to business productivity within the corporate environment.
Today, after a decade of wide internet adoption we are embarking on the 5th wave of technology architecture based around using social, mobile, analytics and cloud computing as the base technology engine. Drivers for this adoption are the users themselves who are being driven by their everyday use of apps and mobile technology, demanding the same value from everyday business interaction. Each of the four individual technologies taken as a standalone entity would provide limited value but put them together as a technology stack then they have a much greater effect in delivery of business impact.
There are many great examples of companies who have embraced this architecture and adapted their business model to fit but none more so than Netflix. Founded in 1997 as a mail order dvd rental service where users would use the internet to select a list of films they wanted which were sent in turn and paid on a monthly subscription, Netflix were entering a crowded marketplace. With the advent of Cloud Computing and increased adoption of broadband services Netflix created a streaming service which removed the need for mail order dvds and provided the user with much greater control on what they wanted and when. Using Social to drive consumer marketing through ratings and recommendations along with suggestions, using mobile to deliver the content through multiple channels so that users could watch anywhere and at anytime, using analytics to understand the trends and behaviours of user viewing patterns and using the pay as you go cloud infrastructure it enabled Netflix to achieve revenues of £3.2 billion in 2011. A great achievement given one of it’s main competitors, Blockbuster, struggled and in 2010 filed for chapter 11 protection and since then have continued to limp forward while the business has been continually ‘streamlined’ by new owners. Netflix is a great example of a company being flexible and adaptable enough to change quickly and take advantage of an opportunity that presented itself.
By understanding each of the constituents of this stack it is easier to see the combined value when put together.
Social provides the relationship mechanic and interaction layer at the top of the architecture ensuring that there is true value for the users, giving them reason to return. This user centric approach ensures that the key stakeholders in any service are at the core of the offering.
Mobile provides the ease of access and the delivery channel for the stack, enabling the service to be distributed anywhere and anytime. Companies need to understand how users want to use mobile to interact with any service and this is a key consideration for any service. The variety of devices, which will only increase, provide different experiences and expectations.
Analytics provides the means in which to learn and understand the user, encouraging the user to generate more data and information is key to the success of any new business model. Gauging what is important to them and how they interact is both critical to usability but also provides new business model opportunities.
Cloud Computing provides a reduced barrier to entry for any new business model. No longer is there a large capital expenditure associated with the creation of any new business model but instead costs are rolled into operations which means any failing new model can be cut quickly reducing the risk. There are many benefits to cloud deployments away from traditional IT which I’ll cover on another post soon.
The intensity of demand can be seen above in the way we are sharing and interacting with new services and to get maximum value from any business it needs to adapt to a new way of implementation. Each part of this new technology stack is powerful in it’s own right but put together as a technology architecture then they become the platform from which new business models can be created!
No longer are new techniques being glued into existing company models but they are instead defining entirely new models.