Digital Darwinism: Survival of the Most Data Savvy

Somewhere, a teenage kid in his pajamas is writing code that will do what your company does for half the cost. Don’t believe me? Ask Blockbuster about Netflix. Ask Kodak about Facebook. Or ask any independent bookseller about In each of these cases, iconic brands with impressive histories were humbled by digital upstarts seemingly armed with only their Silicon Valley swagger and their venture capital fueled dreams.

Actually, they were armed with something else. These darlings of the early internet harnessed the power of the internet in new ways, but their true ingenuity (and one that should serve as a model to us all today) was their understanding of three things:

  1. Intuitive Application Design
  2. Big Data Management
  3. Advanced Analytics

My call to action today is to learn these capabilities too or face the inevitable Digital Darwinism that awaits laggards.

Train the app to the user

There was a time when people attended weeks of training to understand how to use an application. Think of the CRM or ERP applications of the past decade. Now think about that app you downloaded from the Apple or Google store this morning. Think about how you can transfer balances and deposit checks with your phone. No training required because the app was intuitive, useful, and targeted.

My colleague Mike Armentano likes to remind me that the Italians have an expression to describe the best form of cooking: semplicità. Simplicity. This should be the hallmark of Third Platform applications, built quickly in the mobile age, simple in their design, and targeted rather than exhaustive in features. In this application development world, ease of use trumps feature richness. Think the iPod over the Blackberry. Think Dropbox over your corporate file share. Semplicità.

In the time before Big Data was cool

Think for one moment about Netflix, about the physical storage required for one movie and about the ability to stream that data in real-time. Then think about the 64MB thumb drive that you carry around with you. These technologies were impossible. Until they weren’t.

The common thread for the most innovative companies is their embracing of massive data stores as the price of data storage plummeted with the onset of Big Data technologies. For example, according to the National Human Genome Institute, the cost of sequencing a gene has shrunk from roughly $100M in 2001 to roughly $7,000 in 2015. This represents a price reduction of approximately 10,000x. With this kind of cost reduction, companies can create innovative data products delivered through new channels.

That’s right. I said data products. Don’t think that you need to be in the data business? Think again.

What does Netflix deliver? Data…in the form of a movie. What does Facebook deliver? Data…in the form of pictures and comments. Twitter? Your bank app? That game of Candy Crush? Data, data, data.

And here is the real pickle for traditional companies: upstart competitors that sell data products are getting between traditional companies and their customers. First there were organizations like Angie’s List, Kayak, and Orbitz, which could be incented to funnel customers to your door. But this has given way to data products that steal those customers from you. Consider Über’s impact on the taxi establishment or Esurance’s impact on the insurance market. These are examples of how data products attract customers to traditional products. The recipe for continued growth hinges upon the right data product to bring customers to your doorstep. Marriott’s new electronic concierge is a smart move to fend off Airbnb.

Who says elephants can’t dance?

Lou Gerstner, former CEO of IBM, famously asked this question in his 2004 book, challenging the widely held notion that big companies could not be innovative. Established companies have an interesting advantage – decades of information assets waiting to be combined with new internet of things data, social media data, and other exotic data. Companies have some of the best assets in the world to fuel their innovation – a long history of sales, manufacturing, service, and financial information.

In today’s competitive landscape, it is imperative to leverage predictive analytics to create competitive differentiation. Target can famously (or notoriously) predict a woman’s due date within two weeks. Amazon knows what you want to buy next. Your company needs to think strategically about where analytic insights will drive the biggest ROI return. Companies have use cases as varied as prediction of ATM theft, elementary school curriculum development, eLearning planning, and utilities grid analytics for loss. The right answer for your company is one that makes you different from everyone else. We have arrived at the age of innovation, where the only answer is one that is strategically aligned to your corporate goals and helps you recognize and react to market demand faster than your competition.

Call to action

In summary, the opportunities have never been as great as they are right now to drive innovation, bringing exciting products and capabilities to customers. The key will be thinking creatively about your data assets, analytics, and application development. Each requires careful inspection to make sure that you have the capabilities to drive strategic, meaningful change. Focus on these areas will drive growth in new and exciting ways and help you recognize signals from customers, vendors, and employees, as well as machinery, equipment, transportation routes, and distribution grids.

And for those struggling to make the connection between technological capabilities and business strategy, allow me to make a shameless plug for EMC’s Big Data Vision Workshop. This process has helped dozens of companies align business and IT stakeholders to identify their killer use case, driving massive value in a way that is aligned with strategy, values, and capabilities.

The world is talking.  Are you listening?

About the Author: Joseph Dos Santos