Information Technology Everywhere
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Professor N. Venkat Venkatraman David J. McGrath Jr. Professor of Management
Boston University School of Management
[email protected] IBM ASL @ Boston University
February 21, 2011
IT Everywhere
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Imagine life without informaMon technology……
(c) N. Venkatraman [2011] 2
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IT Everywhere
Illustrative Cases and Concepts
What does it mean for IBM (and your clients)?
Discussions
3
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Role of IT Till Recently…
(c) N. Venkatraman [2011] 4
Business
Strategy IT
Strategy
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Let Us Look Back at 1995
(c) N. Venkatraman [2011] 5
1,940,000,000
5,000,000,000
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The World Wide Web in 1995
(c) N. Venkatraman [2011] 6
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State-‐of-‐the-‐Internet 2010…
(c) N. Venkatraman [2011] 7
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8
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There’s the social web.. (Facebook)
(c) N. Venkatraman [2011] 9
• 600(+) million active users • 70% outside USA • 150 Million access using mobile devices • 50% log on in any given day • 700 billion minutes per month
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And there’s the media web.. (YouTube)
(c) N. Venkatraman [2011] 10
2 billion views per day
10% of Internet traffic globally
78% outside USA
1 million video uploads EVERY DAY
$1 million (daily bandwidth cost)
900 seconds – daily average Mme spent per user
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And.. there’s the real-‐Mme web (Twiber)
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Tweets seem to be purpose-‐driven
(c) N. Venkatraman [2011] 12
Link
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There are other trends to track..
(c) N. Venkatraman [2011] 13
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From 1995 Mll today..
• Developments in informaMon technology have been dramaMc and significant
• Shids in management pracMces have been incremental and slow
• New business systems are emerging – Global – Digital – Connected
(c) N. Venkatraman [2011] 14
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2010 Onwards.. The Decade of Smart
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IT Everywhere in 2015: Your Ideas and Insights
(c) N. Venkatraman [2011] 16
One Sure Trend that YOU see…..
One Uncertainty that YOU see…..
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The future with IT…
(c) N. Venkatraman [2011] 17
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A Simple Everyday Example
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InformaMon technology is impacMng design and features of products..
(c) N. Venkatraman [2011] 19
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Nike + Apple : A ‘Sports Ecosystem’
(c) N. Venkatraman [2011] 21
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We conMnue to connect many different products to the network
Products on IP-‐
network
Towards mulM-‐ billion
devices
22 (c) N. Venkatraman [2011]
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But complementary business systems have not yet evolved in many cases..
(c) N. Venkatraman [2011] 23
1999
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Even today....
(c) N. Venkatraman [2011] 24
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InformaMon technology and the design of business process systems..
(c) N. Venkatraman [2011] 25
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FedEx SenseAware
(c) N. Venkatraman [2011] 26
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John Deere & Precision Agriculture
(c) N. Venkatraman [2011] 27
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Smart Processes are becoming more common in many industry sectors.
Healthcare
LogisMcs
Energy
Media & entertainment
Financial Services
Next-‐generaMon business processes
28 (c) N. Venkatraman [2011]
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InformaMon technology ushering next generaMon of services
(c) N. Venkatraman [2011] 29
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Even in ciMes.. (Boston)
(c) N. Venkatraman [2011] 30
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Facebook Pages and Service Delivery
(c) N. Venkatraman [2011] 31
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Services delivered through new devices
(c) N. Venkatraman [2011] 32
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… with new ways of interacMons
(c) N. Venkatraman [2011] 33
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Services delivered through network
Service Delivery
Next-‐generaMon services
34 (c) N. Venkatraman [2011]
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The new digital business plamorm
(c) N. Venkatraman [2011] 35
Live
Work Play
Learn
Connect
Innovate
Consume
Transact
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Let us introduce three technology laws
Bandwidth Law
Metcalfe’s Law
Moore’s Law (c) N. Venkatraman [2011] 36
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And look at them together..
Moore’s Law
Metcalfe’s Law
Bandwidth Law
(c) N. Venkatraman [2011]
“Computer”
“ConnecFvity” “Cloud”
37
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Role of IT in the Future…
(c) N. Venkatraman [2011] 38
Business Strategy I/T Strategy
global business�footprint
service interactions overlapping business
ecosystems strategy for ‘apps’
new platforms cloud-based
business models
data and insights
disruption@scale co-creation across
entities
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In IBM’s parlance…..
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Instrument
Interconnect
Intelligent
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Smarter Systems Rely on Data & Insights
(c) N. Venkatraman [2011] 40
Data Information Knowledge Action Results
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IT Everywhere… Towards Ubiquity
(c) N. Venkatraman [2011] 41
B2B B2C
C2B C2C
Business
Business
Consumer
Consumer
D2D
MulMbillion connecMons with
rich data
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IT Everywhere
Illustrative Cases and Concepts
What does it mean for IBM (and your clients)?
Discussions
42
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Serng 1: Dynamics of IT Sector
Mainframe CompuMng
Mini CompuMng
Personal CompuMng
Desktop Internet
CompuMng
Mobile Internet
(c) N. Venkatraman [2011] 43
1960s 2010s
Source: Morgan Stanley (2009)
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Computer industry [circa 1980]
Source: Bill Gates Testimony Source: Bill Gates TesMmony 44 (c) N. Venkatraman [2011]
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Computer Business System [circa 2002]
Source: Bill Gates Testimony 45 (c) N. Venkatraman [2011]
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Two Key Ideas…
VerMcal integraMon giving way to virtual integraMon When and how do new layers emerge? When do layers disappear or morph? Can you disrupt by introducing a new layer where you hold an advantage?
Can new entrants succeed by introducing new layers?
46 (c) N. Venkatraman [2011]
1
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Two Key Ideas…
Winning requires dominaMng a layer and inter-‐connecMng across layers What’s your pabern of interconnecMons across the layers?
How do your compeMtors interconnect across the layers?
Do you have network advantage? Can you defend it?
47 (c) N. Venkatraman [2011]
2
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Wealth CreaMon and DestrucMon Across Cycles of Business Systems in CompuMng
Mainframe CompuMng
Mini CompuMng
Personal CompuMng
Desktop Internet
CompuMng
Mobile Internet
(c) N. Venkatraman [2011] 48
1960s 2010s
Adapted from Morgan Stanley (2009)
Each cycle required the leaders to arMculate and architect different business ecosystems
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We are in the early days of mobile internet
(c) N. Venkatraman [2011] 49
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We are in the early days of mobile internet
(c) N. Venkatraman [2011] 50
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Emerging Trends in the I/T Sector…..
So
(c) N. Venkatraman [2011] 51
Lo Mo
Source: John Doerr, Kleiner Perkins
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IT Industry Today….
(c) N. Venkatraman [2011] 52
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(c) N. Venkatraman [2011] 53
Products
Plamorms
Services
SoluMons
IT Industry Today….
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Serng 2: AutomoMve
(c) N. Venkatraman [2011] 54
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Automobile– “computers on wheels”
(c) N. Venkatraman [2011] 55
How many lines of sodware code?
‘Black Box’
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Automobiles– “computers on wheels”
(c) N. Venkatraman [2011] 56
“Cost of electronics in cars” (~20-‐50%)
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GM OnStar
(c) N. Venkatraman [2011] 57
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Real-‐Mme InteracMons for Safety and Convenience
(c) N. Venkatraman [2011] 58
• 2,600 AutomaMc Crash Responses • 10,400 Emergency Services • 6,000 Good Samaritan Calls • 600 Stolen Vehicle Assistance • 62,700 Remote Door Unlocks • 54,500 Remote Vehicle DiagnosMcs • 3.4 million OnStar DiagnosMcs E-‐mails Sent • 30,200 Roadside Assistance Calls • 961,000 Turn-‐by-‐Turn Routes Delivered • 29 million OnStar Hands-‐Free Calling Minutes
Monthly data as of 2008 Source: OnStar
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Ford (and Microsod): Sync
(c) N. Venkatraman [2011] 59
In-Car WiFi (2010)
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My Ford Touch @ CES 2010
(c) N. Venkatraman [2011] 60
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Ford Sync in 2011
(c) N. Venkatraman [2011] 61
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Mobile Apps linked to Automobiles
(c) N. Venkatraman [2011] 62
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Business systems forming around compeMng IT architectures
(c) N. Venkatraman [2011] 63
“Apps”
“Apps”
“Apps” “Apps”
“Apps”
“Apps”
“Apps”
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“Apps” bring mobile devices into the automobile network
(c) N. Venkatraman [2011] 64
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Emerging Automobile Business System?
(c) N. Venkatraman [2011] 65
Hardware (Chassis & Engine)
Sodware (OperaMng Systems Layer)
Apps
Data (analyMcs)
Services (safety, entertainment, insurance etc.)
Social Network
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Two Key Ideas…
Who is architecMng the emerging business system in the auto sector? GM? Ford? Sodware companies? Where will value be created? Who holds the architectural advantage?
What’s the role of ‘apps’ in the auto-‐sector?
How will hybrid and electric vehicles alter the business system?
66 (c) N. Venkatraman [2011]
1
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Two Key Ideas…
Winning requires dominaMng a layer and inter-‐connecMng across layers What’s GM’s (or Ford’s) pabern of interconnecMons across the layers?
Does GM or Ford or Toyota have network advantage? Can they defend it?
How will hybrid and electric vehicles alter this sector?
67 (c) N. Venkatraman [2011]
2
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Towards Intelligent vehicle and Smart traffic…..
(c) N. Venkatraman [2011] 68
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Other IT-‐influenced business systems…
• Healthcare and wellness • Energy • Publishing and media
• Retail • LogisMcs and distribuMon • Etc. etc..
(c) N. Venkatraman [2011] 69
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IT Everywhere
Illustrative Cases and Concepts
What does it mean for IBM (and your clients)?
Discussions
70
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Role of IT in Your Client Serng
(c) N. Venkatraman [2011] 71
Business
Strategy IT
Strategy
global business�footprint
service interactions
overlapping business
ecosystems strategy for ‘apps’
new platforms cloud-based
business models
data and insights
disruption@scale co-creation across
entities
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(c) N. Venkatraman [2011] 72
Managing IT Everywhere: Co-‐creaMon of Value with Your Clients
Innovation
Implementation
Your Client
IBM
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In closing……
(c) N. Venkatraman [2011] 73
“The difficulty lies not so much in developing new ideas as in escaping from old ones.”
John M. Keynes
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IT Everywhere