Information Technology Everywhere

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

Imagine life without informaMon technology……

(c) N. Venkatraman [2011] 2

IT Everywhere

Illustrative Cases and Concepts

What does it mean for IBM (and your clients)?

Discussions

3

Role of IT Till Recently…


Business

Strategy IT

Strategy

Let Us Look Back at 1995


1,940,000,000

5,000,000,000

The World Wide Web in 1995


State-‐of-‐the-‐Internet 2010…


8

There’s the social web.. (Facebook)


• 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

And there’s the media web.. (YouTube)


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

And.. there’s the real-‐Mme web (Twiber)


Tweets seem to be purpose-‐driven


Link

There are other trends to track..


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


2010 Onwards.. The Decade of Smart


IT Everywhere in 2015: Your Ideas and Insights


One Sure Trend that YOU see…..

One Uncertainty that YOU see…..

The future with IT…


A Simple Everyday Example


InformaMon technology is impacMng design and features of products..


Nike + Apple : A ‘Sports Ecosystem’


We conMnue to connect many different products to the network

Products on IP-‐

network

Towards mulM-‐ billion

devices

22 (c) N. Venkatraman [2011]

But complementary business systems have not yet evolved in many cases..


1999

Even today....


InformaMon technology and the design of business process systems..


FedEx SenseAware


John Deere & Precision Agriculture


Smart Processes are becoming more common in many industry sectors.

Healthcare

LogisMcs

Energy

Media & entertainment

Financial Services

Next-‐generaMon business processes


InformaMon technology ushering next generaMon of services


Even in ciMes.. (Boston)


Facebook Pages and Service Delivery


Services delivered through new devices


… with new ways of interacMons


Services delivered through network

Service Delivery

Next-‐generaMon services


The new digital business plamorm


Live

Work Play

Learn

Connect

Innovate

Consume

Transact

Let us introduce three technology laws

Bandwidth Law

Metcalfe’s Law

Moore’s Law (c) N. Venkatraman [2011] 36

And look at them together..

Moore’s Law

Metcalfe’s Law

Bandwidth Law

(c) N. Venkatraman [2011]

“Computer”

“ConnecFvity” “Cloud”

37

Role of IT in the Future…


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

In IBM’s parlance…..


Instrument

Interconnect

Intelligent

Smarter Systems Rely on Data & Insights


Data Information Knowledge Action Results

IT Everywhere… Towards Ubiquity


B2B B2C

C2B C2C

Business

Business

Consumer

Consumer

D2D

MulMbillion connecMons with

rich data

IT Everywhere



Discussions

42

Serng 1: Dynamics of IT Sector

Mainframe CompuMng

Mini CompuMng

Personal CompuMng

Desktop Internet

CompuMng

Mobile Internet


1960s 2010s

Source: Morgan Stanley (2009)

Computer industry [circa 1980]

Source: Bill Gates Testimony Source: Bill Gates TesMmony 44 (c) N. Venkatraman [2011]

Computer Business System [circa 2002]

Source: Bill Gates Testimony 45 (c) N. Venkatraman [2011]

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?


1

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?


2

Wealth CreaMon and DestrucMon Across Cycles of Business Systems in CompuMng

Mainframe CompuMng

Mini CompuMng

Personal CompuMng

Desktop Internet

CompuMng

Mobile Internet


1960s 2010s

Adapted from Morgan Stanley (2009)

Each cycle required the leaders to arMculate and architect different business ecosystems

We are in the early days of mobile internet


We are in the early days of mobile internet


Emerging Trends in the I/T Sector…..

So


Lo Mo

Source: John Doerr, Kleiner Perkins

IT Industry Today….



Products

Plamorms

Services

SoluMons

IT Industry Today….

Serng 2: AutomoMve


Automobile– “computers on wheels”


How many lines of sodware code?

‘Black Box’

Automobiles– “computers on wheels”


“Cost of electronics in cars” (~20-‐50%)

GM OnStar


Real-‐Mme InteracMons for Safety and Convenience


• 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

Ford (and Microsod): Sync


In-Car WiFi (2010)

My Ford Touch @ CES 2010


Ford Sync in 2011


Mobile Apps linked to Automobiles


Business systems forming around compeMng IT architectures


“Apps”

“Apps”

“Apps” “Apps”

“Apps”

“Apps”

“Apps”

“Apps” bring mobile devices into the automobile network


Emerging Automobile Business System?


Hardware (Chassis & Engine)

Sodware (OperaMng Systems Layer)

Apps

Data (analyMcs)

Services (safety, entertainment, insurance etc.)

Social Network

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?


1

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?


2

Towards Intelligent vehicle and Smart traffic…..


Other IT-‐influenced business systems…

•  Healthcare and wellness •  Energy •  Publishing and media

•  Retail •  LogisMcs and distribuMon •  Etc. etc..


IT Everywhere



Discussions

70

Role of IT in Your Client Serng


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


Managing IT Everywhere: Co-‐creaMon of Value with Your Clients

Innovation

Implementation

Your Client

IBM

In closing……


“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

John M. Keynes

IT Everywhere

Information Technology Everywhere

Business

boston c

user c

month c

informamon technology

generamon of services

new devices c

devices network c

service delivery c