IT firms must transform
Everything is going digital, so it’s vital for management to understand the digital revolution to exploit the coming digital opportunities. Canalys president and CEO Steve Brazier said IT firms need a chief digital officer and to hire “spiky” employees.
He noted that hiring practices are changing. Before potential leaders would develop a broad sets of skills, for example, in finance and management. “Now they’re looking now for experts in specific areas such as design and analytics. The leaders are not coming from the classic CEO backgrounds. The old methods are dying out.”
Delivering the keynote at yesterday’s Canalys Channel Forum in Bangkok, which had about 950 attendees, he said every company needs to become a software company. Before the industry thought of software as functional.
“There is exciting opportunity using software to differentiate your product as well as to drive marketing and sales activities. Going down the software path gives companies agility. They don’t have do market research and can do A-B testing.“
Brazier pointed out that Tesla is the first software-defined car, which has a built-in SIM so it can be updated overnight. He said the company recently sent out an update that significantly increased the vehicle’s mileage performance.
“This is transformational. And it’s not just the car industry. FedEx is putting sensors in packages so it can share data with customers. Intelligent sensors can measure humidity and temperature. This allows the food and medical industries to charge a premium on standard [shipping methods].”
He said slowing growth means tech companies are moving into new areas and competing against companies that were once their close partners. A few examples include Microsoft coming from nowhere to put pressure on VMware on virtualization, VMware moving into SDN, Cisco taking on HP in the server market, Oracle shifting to hardware - which has damaged is relationship with HP - and Microsoft also moving into Cisco’s UC space.
This change is being driven by the move to the cloud. He noted that IaaS has become totally commoditized. AWS is looking at growing 63% to $3.8 billion this year while its competitors collectively will grow just 48% to $2.4 billion. “And no one is profitable. There’s too much capacity that is underutilized. It’s not possible to grow at this rate without profits and survive.”
The fallout from the revelations that the NSA and others are able to go through IT companies to gain access to users data, he said, has resulted in three developments. “Companies are pushing for better encryption, which is done locally before data is sent to the cloud, developing improved privacy solutions, for example, they’re not storing users’ search history, and finally they’re going open source.”