This morning, Sarah Weller attended the Architecting Digital Business session at Gartner Symposium, run by Chris Howard, Chief of Research for Gartner’s Enterprise Software group.
The session discussed how digital business has given rise to the new economics of connections; made evident by the success of social channels like Facebook, YouTube, WhatsApp, WeChat, Snapchat and other businesses that are focused around connections.
Chris highlighted how there are five rules that digital business architecture should live by:
1. Your people, business and computing portfolio is going to get more complex
2. You will never fix or control everything
3. In a moment, every consumer, customer, business, partner or thing could be an opportunity
4. Starting with what you have first will limit your ability to compete
5. Switch from boxing thinking to tai-chi thinking
— Thomas Appelmans (@thomasappelmans) November 10, 2015
Howard highlighted how digital native companies focus on high-performance, open APIs with new types of architecture, such as that used by Netflix. Indeed, when thinking about Amazon, it’s Amazon Web Services offering for businesses that was a key driver for Amazon’s revenue increase and profitability this year (Amazon has always focused on reinvesting its revenue, at the expense of profitability as it has sought to revolutionise and disrupt the retail industry.) Amazon Web Services operating income in the third quarter ($521 million), was almost as much as Amazon’s whole North America e-commerce business ($528 million). As a digital first company, Amazon is now turning its technical expertise and cloud excellence to helping other businesses; whilst also being able to profit from it. This makes Amazon an emerging class of company that come from a different place, where it is perfectly positioned to help companies as they transition from older style network architecture to cloud first, digital first companies. This has given rise to gains that can be had from re-imagining existing assets and thinking about how a bimodal approach enables companies to unlock pieces of their old architecture. With bimodal, as discussed yesterday, companies have one team focused around supporting existing infrastructure, whilst there’s another focused on innovation and new opportunities.
With this, Howard recommended that companies need to develop digital business architecture leaders, embrace innovation and set a clear path to make this happen.
As mentioned yesterday, algorithms are key to this, helping companies to get more value out of data and understand how trends or changes can affect them. Howard identified that APIs enable the economics of connections, with the scale of the web being the foundation for this. The talk demonstrated the need for companies to continue evolving and continually delivering new services.
When talking about the ever growing Internet of Things, Howard discussed the role that beacons and sensor technology will play. This reflects what we have been saying with Mubaloo Innovation Lab and the role that we see beacons playing in this space. There is quite a lot of complexity and learning that companies will have to get to grips with to get the most value out of this space. Check out the video below to see Mike Crooks discussing some learnings from the ‘How to deploy IoT without making a mess’ session yesterday by Gartner’s Dale Kutnick.
Howard ended by emphasising the need for companies to think differently, divest their interests and leverage both internal and external teams to explore new opportunities. As a last piece of advice, Howard said that the best way to increase trust, is to build things together.
We certainly endorse that sentiment.