CEOs Gather in Palo Alto: It’s Really About Ubiquitous Computing
November 4 2011 by JP Donlon
Are we at one of those cross-roads where at some point in the future it will be obvious to everyone that a major technological advance has left an impact crater the size of Tucson on businesses everywhere? With the confluence of cloud computing, smart phones, and social media, multiple technological forces are coming together to redefine markets and business models. This was the collective view of the more than 65 business leaders who assembled on the campus of Stanford University’s Graduate School of Business to participate in Chief Executive magazine’s CEOtech, a day and half gathering of CEOs and experts to examine how leaders can best harness these emerging technologies for competitive advantage.
What’s different about the current wave that is crashing around the heads of business leaders, is that this time the driving force of innovation and new technology is coming from the consumer side—not business. Formerly, business and government agencies where the drivers of new stuff, and were IT’s big spenders. This time the digital technologies of entertainment, play, and social communication are the driving forces, and business is playing catch-up, according to Michael Saylor, CEO of Microstrategy, a business analytics company based in McLean, VA. The smart phone promises to replace the PC as the personal technological gadget common to most users. Not that personal computers will disappear—PCs will have their uses, but the sheer ubiquity of mobile devices loaded with innumerable “apps” leads to their dominance. Morgan Stanley contends that combined shipments of smart phones and tablets such as Apple’s iPad will overtake PCs by the end of this year. Forrester’s Julie Ask commented that 1 billion smart phones will be sold by 2015 up from less than half a billion in 2011. EBay CEO John Donahoe told the group in Palo Alto, CA how necessary it was to rethink a number of the online retailers’ offerings and features if it was to remain vital.
Cloud computing, which is fueling the convergence of these technologies, has been around for years. It is little more than an efficient way of distributing digital services and juggling data centers using various Internet technologies. Its primary advantage was to cut costs. But more recently, the flexibility of not having to have one’s own dedicated servers to host data has allowed people to adapt and be flexible in fashioning their business models. IBM, forexample, estimates that it will have $7 billion in cloud revenue by 2015. Dell said it would be investing $1 billion over the next several years to build 10 new data centers largely to offer cloud services. Security concerns about having one’s data on other people’s servers doesn’t seem to inhibit those who see a bigger upside in reduced costs and greater flexibility. M.R. Rangaswami, founder and CEO of the Sand Hill Group and Yves Lermusi, CEO of Checkster opined that company IT departments will likely face a big overhaul in the near future.
CEOs at the event seemed to agree that the conjunction of personal communication platforms from Twitter, and Facebook with mobile telephony will pose serious challenges to how business will be conducted. They are not of one mind how these forces will play out. Each is experimenting at the margin to see what works and why. The drama continues.