Companies must fundamentally change the way they do business to survive in an era of unprecedented technological change, industry leaders have warned.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
Speaking at The Economist’s Technology Frontiers conference, Amazon chief technology officer Werner Vogels said: “Businesses need to become more experimental. Product cycles are still lasting years, while small innovative businesses take just months.”
He said organisations must bring products quickly to market, measure how customers are using them, and either iterate or kill the product.
“You have to reduce the cost of experimentation, and cloud is the biggest driver in doing that,” said Vogels.
He said the web has created a crowded market for products, with consumers no longer having a sense of customer loyalty. “You have to be extremely attuned to what customers want. You cannot afford two to three-year cycles.”
Increasing consumer choice is driving greater uncertainty for business, according to Vogels. “You have to go back to the customer much faster and earlier than in the past.”
He said the point of big data was to discover information about what customers are using products, who they are and how they are using them, which raises questions as to how businesses store, organise, analyse and ensure the quality of that data. “Cloud computing is a driver in big data innovation,” he added.
“Enterprises can take lessons from how young businesses deliver consumer services that customers really want. If you are reviewing cloud computing as just another datacentre, you are losing out – it’s about fundamentally [changing economics],” said Vogels.
“If you want to exploit it, you need to believe in the system. If you don’t do it, you will die, you will be a dinosaur. Consumers decide what to pick,” he said.
Vivek Kundra, vice-president at Salesforce, and former US CIO, agreed. “In the consumer web, you are one click away from extinction,” he said.
“For too long, many businesses have been run like industrial-era organisations, with command and control structures," said Kundra. "Have you built a social network in the organisation to allow employees to collaborate? And what about products communicating with customers in real time?” he added, citing the growth in smart devices – such as fridges and talking cars as an example of this trend.
“That is the future of business, we will see unprecedented creative destruction of businesses not embracing [innovations],” he said. “This is fundamentally reengineering entire sectors of the economy.”
Also speaking at the conference, Carlota Perez, visiting scholar at the London School of Economics, said industry will experience an intense period of creative destruction, with products now being turned into services, such as 3D printing, and software.
She likened the current economic period to that of the 1930s, before the "golden age" of mass consumerisation and innovation.
In the new world, she said, consumers would become “pro-sumers”, proactively engaging in consumption. “Medicine will no longer be seen as a ‘war on germs’ but a joint effort between doctor and individual.”
She said a consensus between business, government and consumers would be needed to create this vision.