Edition 10 The View Inside Technologies Collide and Industries Transform
Edition 10 The View Inside Technologies Collide and Industries Transform
Edition 10 The View Inside Technologies Collide and Industries Transform
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The impact on industries can’t be overstated. ‘The World is Flat’ author and New
York Times columnist Tom Friedman so aptly stated this recently1:
While such predictions could be easily dismissed in the past, they can’t be today.
The reason is that a growing number of companies are getting rich by using
these technologies in these ways. They offer dollars-and-cents proof that the
transformation is here. Consider three stunning statistics on the money some firms
have already made (or their value in the stock market) by tapping into the cloud, AI,
IoT, and other mobile digital devices and the internet:
•$
2.4 trillion: The combined market value of Facebook, Apple, Google parent
company Alphabet, Amazon, and Netflix in June.2 All but Netflix deliver their
digital services to your digital devices through the cloud (their own data centers).
Netflix delivers its video services through Amazon’s cloud, AWS.
•$
39 billion: How much revenue investment analysts predict Facebook
will produce in 2017.3 (Its 2016 revenue was $27.6 billion.) If it hits that number,
Facebook’s revenue will surpass the revenue of the entire U.S. newspaper industry
in 2016 ($29.6 billion).4 From where does Facebook get that revenue? Since (unlike
newspapers) its members can get its content for free, Facebook gets it from
advertising that the company can tailor to its members’ needs and tastes. And it is
increasingly using AI to target those ads.
1
The New York Times, Climate Shifts Aren’t Limited to the Weather, August 02, 2017, Accessed August 02,
2017, https://www.nytimes.com/2017/08/02/opinion/climate-change-technology-globalization-china.
html?ref=opinion&_r=0
2
Fortune, FAANG Tech Stocks Are No Bargain. Here’s Why, June 15, 2017, Accessed August 02, 2017, http://fortune.
com/2017/06/15/faang-tech-stocks/
3
Financial Times, The estimate of Facebook 2017 revenue was the consensus of the 34 stock market analysts who
cover the company, Accessed August 02, 2017, https://markets.ft.com/data/equities/tearsheet/forecasts?s=FB:NSQ
4
PR Newswire, Newspaper industry revenue number from PwC, June 05, 2017, Accessed August 02, 2017, http://
www.prnewswire.com/news-releases/pwcs-entertainment--media-outlook-forecasts-us-industry-spending-to-
6 reach-759-billion-by-2021-300469724.html
•$
7 billion: How much revenue General Electric (GE) expected to generate
in 2016 from its digital business, which helped the company, customers, and its
industry partners capitalize on IoT devices and software. GE predicts the number
will be $15 billion by 2020.5
I hope we have begun to convince you (if you weren’t convinced already) that this
technological revolution is having substantial here-and-now consequences. The
articles we’ve assembled in this issue of Perspectives shed light on why things are
playing out this way.
We’ve organized the articles into two sections: the business opportunities of the
technological transformation, and how to pursue them. Here is a preview of each article.
in Your Company
Industrial-strength AI is ready for deployment. But one of
the biggest challenges for large companies is determining
where to use it. Although the possibilities are endless,
companies’ budgets, of course, are not. In their article,
Ashok Pai and Krishna Mohan give executives a way to
identify the best places to use AI in their organizations.
Why Your Products Must Be Smart and Connected See page 26.
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Investors.com, GE Sees Digital Revenue More Than Doubling To $15 Billion By 2020, June 23, 2016, Accessed
August 02, 2017, http://www.investors.com/news/ge-courts-silicon-valley-investors-for-digital-industrial-push/ 7
See page 38. Now You Can Simulate Nearly Anything
Suppliers of public cloud computing services such as
Amazon Web Services, Microsoft, and Google represent
a powerful capability that many companies don’t
realize they now have: to simulate strategies, product
and service concepts, and new business processes
at affordable prices. In their article, PR Krishnan,
Satishchandra Doreswamy, and Suranjan Chatterjee
explain why this is so important today, and seven
applications of simulations that promise big benefits. To
illustrate each one, they point to examples at Kellogg,
Aon Benfield, GE, and HSBC, among other companies.
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Why Agile Software Development Requires See page 60.
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See page 82. The Big Opportunities at
the Junction of AI and Analytics:
Interview with Tom Davenport
We are delighted to feature an Interview with Tom
Davenport, a leading chronicler over the past 30 years on
how information technology has radically transformed
the work and very essence of large businesses around
the world. Since the late 1980s, Davenport has been a
pioneer of business process redesign/reengineering,
business analytics, and other leading concepts. He
has published several classic Harvard Business Review
articles and bestselling books on the business value of
enterprise systems, knowledge management, big data
and analytics, and most recently AI. I think you’ll find
Tom’s interview eye-opening, particularly his call for
companies to stop focusing on using technology to get
rid of people.
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Executive Traits for Recognizing the See page 91.
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