Pretty much every year we hear how fast technology advances, and if businesses “don’t act” they’ll get left behind. And then another year passes, and the same things are said again, and then again, and again. Yet it doesn’t ever seem like small businesses are really left behind. Even the ones that move very slowly manage to hang in there. So why now? Why is technology more important today? Why should a business sit up and listen today? Well, there are actually a few pretty good reasons this shift we’re seeing now is different than it has been in the past.
To get right to the point, we’re all here to stay in business. To do that we need to make great decisions and execute them well. Making great decisions around your technology strategy is no different. You need to take a look at the data, examine trends, make a good decision, then implement, which leads us back to the original question, why is technology more important now than it ever has been? Let’s examine some of the components we feel have moved the ball forward.
The cost of technology has, and will continue to drop.
With anything new, cost is a major barrier to mass change. The same was true for the telephone, electricity adoption, and even the pace of the industrial revolution (the cost of transporting goods). But with most major shifts, the cost barrier is temporary. Similar to Tesla’s model S paving the way for the mass market Model 3, the last few decades of technological advancement have paved the way for mass commercialization of technology.
To give you an example of how drastically the costs on technology have come down, just look at the smartphone. If you look at the storage, memory and processing power of an iPhone 5s today, it would be the equivalent of a $3.56M computer in 1991. That’s $3,560,000!! Not good enough? Well then consider this; a common way to determine the cost of compute over time is based on an approximate cost per gigaFLOPS (think of it as the power necessary to perform 1 billion mathematical equations). In Jan. 2015 the approximate cost per GFLOP was roughly $0.08. The equivalent cost in 1961 (inflation adjusted) was roughly $8.3 Trillion!!! Think about that for a second, what we can do today for under a penny, would have cost us $8,300,000,000,000.00 in 1961. That is a tremendous reduction in cost of compute over time.
Technology is more accessible now than ever before.
Another variable is the greater accessibility of technology today. This is partly to do with costs dropping, but also in part from non-profits like, computeraid.org, Passportswithpurpose.org, One Laptop Per Child, and others getting technology into the hands of all, and in part from numerous free Internet programs (like SpaceX’s, Google Loon and Mark Zuckerberg’s Internet.org) that connect everyone together to share issues and ideas.
With costs shrinking and accessibility increasing, more people all over the world are collaborating to push the limits of what is imaginable, and what is possible. The more people that have access to technology, the more you drive innovation. It’s as simple as that. More people, with more access to technology, equals an unstoppable R&D department. And one that is pushing advancements because they want to, not because they are paid to do so.
We can already see the interesting ways that harnessing the power of this crowd is advancing science, aerospace engineering, and pretty much every large company focusing on accelerating innovation. The bottom line is that as the number of people playing the game increases, the faster new inventions and innovations come to market. The faster these changes come to market, the more businesses will need to pay attention.
Disruption can come from any angle.
When considering the changes of late, we can’t avoid talking about new disruptions in established industries. And I know, disruption is another term that is thrown around a little too often, but the threat to business is real. And unless you’ve been living under a rock lately, you’ve have probably heard about the turmoil companies like Amazon, Uber, Nest, Netflix, SpaceX, Tesla, Google, Apple, Bitcoin, and others have caused in varying industries. But what is not always made clear is that a lot of the current disruptions are in adjacent industries as well. Tesla for example is disrupting the energy storage industry, Uber is starting to disrupt the food delivery industry, Red Bull is disrupting the sports publishing industry, Apple disrupted the smartphone industry, Google virtually destroyed the GPS industry. What businesses sometime forget is that major technical trends outside of their primary industry, can still cause collateral damage to their businesses. Just because your industry may be moving slowly, does not mean you can avoid the tidal wave.
So the data is showing us that technological innovation is moving at a faster pace than we ever thought possible and as more people have access to technology, and get plugged in to mass collaboration and communication, this will continue to increase. That along with the volatility of disruption stemming from technology based entrants, creates a higher risk environment for businesses that do nothing. Now add to the mix that it takes time to transition a business from just having some technology, to a company that drives technology based business model transformations, and you can start to see why timing is very important. You may not agree that today is the day you need to address your tech strategy, but hopefully you’ll agree there is a day in the not too distant future, where it will be too late.