The Digital Transformation – platforms and network effects
- 1. Kim Hiort Nielsen, Country managager Hybrid Cloud IBM The Digital transformation – platforms and network effects
- 3. What’s putting the world’s top executives on edge?
- 4. CxOs expect industry convergence to have the biggest impact on their business Total CEO CFO CHRO CIO CMO COO 70% 60% 50% 40% 30% 20% 10% 0% Industry convergence The “anywhere” workplace Rising cyber risk The redistribution of consumer purchasing power The sustainability imperative Alternative finance and financing mechanisms The sharing economy Top trends to impact business (in 3 to 5 years)
- 5. External forces impacting the enterprise (in 3 to 5 years) For the first time, the entire C-suite selected technology as the main game changer Technology factors Market factors Regulatory concerns Macro- economic factors People skills Socio- economic factors Globalization Geopolitical factors Environmental issues 72% 71% 55% 51% 48% 34% 31% 31% 27%
- 6. The technologies that CxOs expect to revolutionize business tomorrow are already in play today Cloud computing and services Mobile solutions Internet of Things (IoT) Cognitive computing Advanced manufacturing technologies New energy sources and solutions Bioengineering Man-machine hybrids 63% 61% 57% 37% 28% 23% 12% 10% Technologies revolutionizing business (in 3 to 5 years)
- 7. Market disruptions New markets New business models
- 8. InterBrand: Best Global Brands
- 11. Platforms = 80 of 115 firms worth $1,000,000,000+ Source: P. Evans, CGE; CB Insights, Capital IQ, CrunchBase, 2015
- 12. The Product Business Model is Broken
- 13. The Product Business Model is Broken In 2009, BlackBerry had nearly 50% market share in U.S. operating systems, according to IDC. Now: 2.1% 2008 2009 2010 2011 2012 2013 50% 40% 30% 20% 10% 0%
- 14. 1980-2000 Microsoft Platform Beats Apple Product Apple launched the PC revolution but Microsoft licensed widely, built a huge developer ecosystem, 6X larger.
- 15. Apple Feb 5, 1996 Michael Dell - ”Shut it down and give the money back to the shareholders.”
- 17. Nike Builds a Biz Platform
- 18. Network Effects Value rises as more people use the platform Metcalfe’s Law
- 19. Each Side Attracts More of the Other eBay Buyers Uber Riders Xbox Gamers Amex CardHolders Aga Khan Patients YouTube Viewers AirBnb Renters Tesla Car Drivers Mechanical Turk Jobs LinkedIn Employees Android Users eBay Sellers Uber Drivers Xbox Developers Amex Merchants Aga Khan Doctors YouTube Videographers AirBnb Rooms Tesla Charge Stations Mechanical Turk Laborers LinkedIn Employers Android Developers
- 20. In any market with network effects, the focus of attention must shift from inside to outside the firm.Reason: You can’t scale network effects inside as easily as outside. Source: Marshall Van Alstyne
- 21. To have an external focus, you must have an API strategy. ... this implies ...
- 22. and growth is accelerating dramatically APIs represent a new, fast-growing channel opportunity Business models are evolving stores (800) ###s web sites web APIs According to Gartner, by 2016, 75% of the top 50 global banks will have launched an API platform By 2016, 50% of B2B collaboration will take place through Web APIs. Sources: Gartner, Predicts 2012: Application Development, 4Q, 2011; Gartner, Govern Your Services and Manage Your APIs with Application Services Governance, 4Q 2012; Gartner, Open for Business: Learn to Profit by Open Data, 1Q 2012 APIs are a path to new business opportunities Web APIs are the new, fast-growing business channel Businesses are Evolving stores (800) ###s web sites
- 23. Exposing systems of record to Mobile apps • Enterprises are taking existing businesses into the mobile world. Their data resides on-premise. For mobile apps to be interesting & useful, they need access to this on-premise data. • APIs provide a secure and simple way to allow mobile apps to access existing on-premise data. Accelerate internal development • APIs don’t always have to be exposed to the world. Many companies build much of their internal code in form of APIs, for reusability. • Result: a library of useful components that can be reused to greatly accelerate app development Expand the reach of your business • Increasingly, businesses are expecting to consume your product/service in the context of other related services. This means interacting with your business not through your web page or store, but through APIs • APIs enable partners, entrepreneurs, developers to build/embed your service into theirs Build hybrid cloud applications • The canonical hybrid cloud app resides in the public cloud, and accesses data that must remain on- premise for legal, security, regulatory reasons. • APIs provide a secure and simple way to allow hybrid cloud apps to access on-premise data Monetize data and services • Businesses often have high-value data and services that they can provide and sell to others • Peugeot (French auto manufacturer) sells their connected car data to external business partners via APIs, resulting in a new revenue stream 1 2 3 4 5 What are some common use cases in the API Economy?
- 24. • Estimate global taxi market • Estimate market share • Est. risk adjusted cash flow • Consider proprietary methods, barriers to competition • Value: $5.9 Billion Aswath Damodaran: NYU Finance professor, Corporate Valuation author, Herb Simon Prize.
- 25. Bill Gurley: Venture Capitalist, OpenTable, Zillow, Uber All true but overlooking network effects. Source: David Sacks, COO PayPal, CEO Yammer Value: $17 Billion
- 26. Platforms Unlock New Value from Spare Resources and User Generated Content What Changes :: Supply Chains
- 27. AirBnb sells users’ spare rooms, competing with hotels that must own them RelayRides sells users’ spare cars, competing with rental firms that must own them
- 28. Instagram sold for $1B not because of contributions from 13 employees but from 30 million users
- 29. 2005 2013
- 31. ’’In 2015, Uber, the world’s largest taxi company owns no vehicles, Facebook the world’s most popular media owner creates no content, Alibaba the most valuable retailer has no inventory, and Airbnb the world’s largest hotelier owns no real estate.’’ Tom Goodwin, Sr. VP of Strategy Havas Media
- 32. Why are the old competitors not the new competitors? Isn’t afraid of … publishing broadcast electronics cars watches delivery + but should fear …
- 34. Disruptions in Pharma • Empowered patients • Health Gamification • Argumented reality and virtul reality • Genomics and truly personalized medicine • Body sensors • 'Do it yourself' biotechnology • 3D printing revolution • End of human experimentation • Medical decision making with artificial intelligence • Nanorobots
- 35. What’s Next?
- 36. City as Platform
- 37. Energy/Smart Grid as Platform
- 40. Hvis dette har vakt din interesse så skriv endeligt til mig.
Editor's Notes
- #2: Introduction to yourself – David an Goliath story
- #4: A few years ago, CxOs could see the competition coming. The biggest risk was the advent of a new rival with a better or cheaper product or service. And you could fend off the threat by improving or expanding the range of products and services you offered, or getting to market more efficiently and imaginatively. Today, the competition’s often invisible until it’s too late.
- #5: Source: Q1.3 Which of the following trends will impact your business in 3 to 5 years? [Rank up to 3] CxOs are acutely aware of the change. We asked them to identify which business and technological developments they expect the next "wave" to consist of. Industry convergence clearly eclipses any of the other trends they anticipate in the coming three to five years.
- #6: Source: Q1.1 What are the most important external forces that will impact your enterprise in 3 to 5 years? [Select 5 without ranking] But now, for the first time ever, the other members of the C-suite also see technology as the main game-changer. While CxOs overwhelmingly agree on the importance of technology, they’re more uncertain about its impact. On the one hand, CxOs welcome the chance to develop better goods and services, utilizing more efficient manufacturing techniques and more sustainable energy sources. On the other hand, CxOs are desperately trying to cope with a “technological onslaught.”
- #7: Source: Q1.4 Which of the following technologies will revolutionize your business in 3 to 5 years? [Rank up to 3] Most CxOs, regardless of their role, were fairly consistent in their view that cloud computing, mobile solutions and the Internet of Things (IoT) are likely to predominate in the coming three-to-five years. Cognitive technologies (systems that understand natural language and are not programmed, but learn) lie next on the horizon, as the bridge to new levels of personalization and insight from exploding volumes of data.
- #10: Children say “Google it”
- #11: Children say “Google it”
- #12: Lightbulb lasts longer than your lease. Why would you buy?!?
- #14: NOT stupid people, Each company made right decision by old business model. Under their world view, it used to be the right business model (use also for Sony)
- #17: Children say “Google it”
- #18: Hvem er jeres konkurrenter
- #19: The goal is more matches and more transactions volume creating more customer value.
- #23: the fact is that by dec 2013, it crossed 10000 api shows the exponential growth of APIs, almost doubling every 5 months Key message from Gartner that 75% of the fortune 1000 will have a public API by the end of this year. Shows how rapidly this is being adopted. And, given that many will first do an internal or partner API, this is very fast adoption.
- #24: Peugeot story at: https://w3-connections.ibm.com/blogs/WSSuccessStories/entry/websphere_and_big_data_technology_help_peugeot_charge_into_car2car_and_mobile_to_offer_innovative_connected_car_services?lang=en Customer-facing slide on Peugeot reference in this APIM references deck: https://w3-connections.ibm.com/communities/service/html/communityview?communityUuid=3fd24b59-2d55-4fd1-a470-107cec8cf057#fullpageWidgetId=W2f2ef9e89a68_4f7c_95d2_663c9eefccdd&file=2198f2c3-7dfe-46f2-a9ba-5da01fdf012a
- #33: Toyota knows how to compete with Ford but now with Uber or Google Car (invented JIT inventory!) Market cap Honda $56B, Ford $58B, Uber $41B! Jan, 2015