Updated: Jan 20
The shift from physical hardware to software was a huge milestone for the businesses as virtualization and cloud emerged as technologies and enabler in parallel with new business models. Organizations made the shift so they can stay relevant and could respond to market demands as fast as they can. Now, it is time for another shift as software become legacy; Shift to become a Data business.
If you are in IT and technology industry long enough, you remember the time that organizations such as IBM, Cisco, HP, DELL and others started their business based on box selling. They built these hardware boxes as the hardware and chipset technology became cheaper and they set up creative business models to sell their products. Fast forward to late 90's and early 2000's, virtualization and later in 2010's cloud technologies, made businesses to make a big shift towards software to become more agile and creative in terms of market demands so they can provide agile and scalable end to end solutions (not just boxes) to serve millions of customers. The agility and scalablility nature of software allow organizations to build things faster than ever, combined with methodologies and team structure methods like DevOps, to bring Development and Operation teams under one umbrella to continuously deploy new features and get feedback as fast as they can.
Becoming a data company is inevitable.
This all was going well until something new is now becoming the dominant conversation: Data. As technologies such as IoT (Internet of Things), Virtual and Augmented Reality, Blockchain and Artificial Intelligence maturing, the amount of data that people and organizations are now producing is booming at massive scale. Now the question is; how to harness these data and find out what to do next?
To be able to answer this very fundamental question, organizations need to make another massive shift in their approach to their business. The main important thing to understand first, is that data is not an IT thing. Means IT is not owning the data and should not be in charge of managing its life cycle. Simply, this will shift the conversation of data to the business level and to be able to do this properly, companies need to make another shift: shift from being a software business to become a data business.
I just give you an example: A weather app company found that its users are using the app to find out how the weather look like 3-4 times per day. But they use the app only for 2-3 seconds each time. So, leadership team came to this conclusion that they provide the value but how they can turn this to more business and revenue. What they did next was to look for patterns on how people are behaving in different weather conditions. For example, they found that people buy umbrella and apple in rainy days. Everybody could understand why people buy umbrella but nobody could find why people buy more apples in rainy days. They found more of these patterns and started to implement targeted advertisements. For example in rainy days, they had targeted ads for umbrella and grocery stores etc.
The result was doubling their incoming revenue for the first year. They were no longer a weather software company, they become a data company.
There are lot of these examples that businesses are using the power of data to make better and in some cases different decisions.
Another example is Tesla Motors founding and running by Elon Musk. Tesla has made it a policy to log all the data they could from their customers, which is all sent to the cloud to be analyzed with algorithms and software. All of the data they gathered helped them to grow as a company, and become a contender in the automotive industry.
Here is how.
This will put Tesla Motors in a position to have a more dynamic relationship with their customers and find out what they want before they even know it! Being a proactive business rather than traditional reactive organization, will improve the business and as the result, how people live.
On another example, here is Microsoft approach to improve user experience using data:
Becoming a data company is inevitable and must be the new horizon for organizations and startups if they want to be in the market. There is simply no other way . . .