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Why Investing in Technology is No Longer Considered Optional

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January 31, 2017, by Sid Probstein, CTO & VP Professional Services, AI Foundry

Yogi Berra famously said that “The future ain’t what it used to be.” When it comes to technology, predictability is an elusive concept. Many companies prefer to adopt technologies when they reach a point of maturity. Then they refine it – implementing so-called “point solutions” for years, while waiting to see what technologies ultimately emerge to replace it. Carlota Perez, a researcher at Britain's University of Sussex, in her book “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” (Edward Elgar, 2002) details part of the challenge. The lifespan of a technology can be long and, in some cases very long, decades or more as in the case of the Data Warehouse.

The Life & Times of a Technology

Big Data Infrastructure seems to be headed in that direction. By one recent estimate there are some 2,000 companies in the Big Data space, spread across some 50 categories. That means there are approximate 40 companies in each category; that’s an incredible number, especially when one considers that at the height of the data warehouse era there were likely less than 10 companies selling a data warehouse solution.

In each Big Data category, the organizations are specialists in a given business, industry and sub-category. At this micro-innovative level, the business life cycles of these Big Data companies are fast. They may be acquired and or simply continue to grow, especially if they are open-source based (as a majority are). These companies are agile and seek close relationships with customers who have the business problem they are trying to solve. In solving it, they create something that could potentially appeal to a wider audience; but at a minimum provide a huge benefit to those original buyers.

As a result, it is no longer reasonable for organizations to take a “wait-for-mature” technology approach. Doing so, in fact, ensures a slower pace of innovation, which translates into higher costs and a poorer customer experience. It’s essential to find small, innovative companies and partner with them. It allows businesses of all sizes to fund the next-generation technology – instead of waiting for it and potentially dying off at the hands of one competitor who nails it, early. Transform or be transformed is today’s mantra because the fast pace and scale of success with an app or the web means organizations must continually refine their product offering, in order to remain competitive.

Consider the humble New York City taxi. It has evolved for decades in line with the needs of owners, drivers and consumers.

Over the past decade, the NYC taxi commission worked to come up with the newest generation of the NYC taxi. Nissan ultimately won the contract to design and build it and they premiered the state-of-the-art Nissan NV200™ in 2013.

What the customer needs?

As a taxi company owner, would you buy one of these cabs? Of course not! Simultaneously, the cab industry suffered massive disruption in 2012 because of what consumers actually wanted-- an app that hails a ride. Not a better taxi. A better service. UBER was born.


What if the NYC taxi commission had partnered with UBER – or better yet, conducted a joint venture with VCs and suggested a mobile solution, ultimately made available to all cities and drivers via an open source, open API approach?

For whatever reason, this did not happen and now, many taxi companies are going out of business. The other day I took an UBER to the train station and was pleasantly surprised to see a taxi driver I’ve known for 10+ years – who has taken me to the airport at least 100+ times. He’s now driving for UBER. “This is where it’s at,” he said, "the taxi industry is dead."

The lesson to take from this is that every business of every size needs to be aware of the power and impact of digital transformation, regardless of our best efforts to stop or ignore it. Identifying, evaluating, investing in and ultimately partnering with the relevant players in your industry – and figuring out which ones outside your industry can provide benefit is essential in today’s digital disruption environment.

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Reach out to the author:
Sid Probstein, CTO & VP Professional Services,

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