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The Real Disruption Behind Social, Mobile, Cloud, and Big Data Lies in Decentralization

This blog is the result of a debate with my colleague Rahul Asthana, who asked, which of the four forces in Gartner’s Nexus of Forces: social enterprise, mobile devices, cloud computing, and big data, is really truly disruptive to the IT industry and practice today.

Replatforming to Mobile Devices

The evolution of mobile phones to smart phones over the last decade.

I thought this was the easy answer. Mobile devices, especially iOS based devices, have been steadily disrupting their way through several industry segments: first dethroning Blackberries as the enterprise smart phone of choice, causing Nintendo to start losing money, and even throwing  into disarray the advertiser supported models of consumer social media companies such as Facebook and Twitter. It won’t be long before we’re ditching our laptops for smart phones, our smart phones for augmented reality glasses, and our electronic glasses for brain implants.

Viral Adoption in Consumerization of IT

Workers will choose enterprise software with a user experience as delightful as their personal software.

Social enterprise is a set of features and a kind of user experience that is part of the larger trend of “consumerization of IT.” Consumerization refers to business users’ expectations to use enterprise software that provides as delightful and productive an experience as consumer applications they use, and business users’ ability to choose which applications they want to use to do their jobs with or without IT support . Applications suffering from significant “technical debt” become painfully obvious since they no longer meet state of the art user experience expectations and features. Consumerization provides a mechanism to enable disruption through viral adoption, but I would not call it disruptive in itself.

Blue Ocean Opportunities in Big Data

Blue ocean innovation refers to when you create new opportunities with little or no direct competition.

I generally do not consider big data to be disruptive. The ability to handle high data velocity with technology such as Hadoop, and large data volumes with solutions like SAP HANA in fact enable new kinds of applications we could never achieve before. In other words, this is closer to blue ocean innovation than simply being a better way to do what we already know how to do. Gartner analyst Dan Sholler wandered by as I was penning this blog. He made the point that existing applications that have to deal with large persistence stores will have their architecture fundamentally changed, so it’s fair to call for a disruptive potential here. Replacing SAP Business Warehouse Accelerator was in fact one of the first commercial use cases for SAP HANA.

Commoditization of IT in Cloud computing

Cloud computing facilitates innovation by lowering IT costs to support that innovation.

At its core, cloud computing is commoditization and automation of IT services.  Cloud has been an enabler of the disruptive business models of Software as a Service (SaaS) vendors which have been remaking the IT industry. However, this same commoditization is also helping IT cope with this disruption. Legacy on premise software is finding an extended life in public and private clouds.

Similar to big data applications, native cloud applications can be architected to take advantage of elasticity and software managed operations. This automation and service orientation is disrupting not just traditional software company’s business models but also traditional IT service providers.  Disappearing are the long term large scale implementations, and wholesale IT outsourcing. Now companies can outsource IT services at a much more granular level such as e-retailers subscribing to email response or DNS services to add elasticity and reliability on cyber Monday.

While commoditization of business processes in SaaS is helping more companies gain enterprise-grade capabilities, it’s not helping them differentiate. As a result, we’re seeing a renewed interest in custom software development in cloud-based platforms as a service. In fact, some analysts are saying we are in “the golden age of software development”, and that “Developers are the new king makers”.   I find it interesting how this commoditization of IT services actually serves as a facilitator of innovations that lead to disruptive competitive advantages.

The Nexus of Forces is Simply the Result of the Decentralizing Communications Revolution

Value distribution, such as information and energy, in our society is transforming from hierarchies to networks of people.

Sitting back and thinking about where the world seems to be trending in general, however, I realized that these four trends are simply aspects of a greater change occurring in the world – the unraveling of hierarchies into decentralized networks. I recently read The Third Industrial Revolution by Jeremy Rifkin who asserts the simultaneous decentralization of energy production and communications is enabling a radical reshaping of our society that we are just beginning to realize.

The music companies didn’t understand distributed power until millions of young people began sharing music online and corporate revenues tumbled in less than a decade. Encyclopedia Britannica did not appreciate the distributed and collaborative power that made Wikipedia the leading reference source in the world. Nor did the newspapers take seriously the distributed power of the blogosphere; now many publications are either going out of business or transferring much of their activities online. The implications of people sharing distributed energy in an open commons are even more far-reaching.

The Third Industrial Revolution by Jeremy Rifkin

This unraveling is affecting government, the financial system, energy distribution, transportation, supply chains, corporate management, and employment.

This transformation won’t occur overnight anymore than the first and second industrial revolutions happened, but we’re already seeing its effects. Consider the Arab Spring which toppled many older command-and control dictators partly through improved communication and collaboration among the people through social media.  Consider today how employees often are contractors, and many approach their work and careers as being independent contractors rather than having a lifetime career commitment to the companies they work for. Our kids are who accustomed to collaborative networks of colleagues have little respect for hierarchies of authority without merit.

I’ve heard some argue that this improved communication simply makes it easier to centralize and control information: a single government controls the Internet, a single company dominates social media streams, everywhere we go and everything we do is tracked via our mobile devices and interactions and stored somewhere in the cloud. While this centralization is a hazard, it will have to be done by artificial means such as through force of government. It will not the nature of this collaborative network to allow domination of any single entity for more than a moment of time.

Looking for Opportunities for Innovation

When looked through the lens of decentralization you realize that consumerization is simply the features we want to interact with services, mobile devices are the hardware through which we prefer to interact with these services, and cloud computing frees us from the burden of manual operation of the systems that provide these services and store information. You can argue that big data is more of a centralizing force than a decentralizing force, but only at the nodes of this vast decentralized network. Consider this network itself is the source of a lot of this big data since it’s made up of more than just people. The fastest growing additions to the network are smart devices and sensors. In fact, Cisco forecasts that inter-device communication grow as much as 300% by 2014.

I bring this up because I think this decentralization speaks to the real opportunities for innovation and disruption. How do you enable or ride this trend of decentralization? How do you help people and companies cope with and thrive during this transition?  Consider this transformation will be upon us in waves of disruption, not unlike a tsunami which is a lot more than a single bulge of water. This is going to be a bumpy ride, especially for those currently depending on or benefiting from the current hierarchies in life. However I’m hopeful that this emerging decentralized network becomes a lot more efficient in spreading opportunity, and proves to be a lot more resilient. In short, lets hope the fabric of our society does indeed become a fabric.

What are your thoughts for opportunities for innovation with social, mobile, cloud, or big data applications? Is there anything your company is doing that you’d like to share? Do you agree with mine and Jeremy Rifkin’s view of a decentralization trend in our society?

To learn more about what SAP is doing to foster innovation in the nexus of social, mobile, cloud, and big data, check out some of these links:

SAP NetWeaver Status and Update
SAP Hana Cloud Platform Press Announcement
Stricly Alpha – SAP Goes Social

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      Author's profile photo Nishan Dev S
      Nishan Dev S

      Greg, Nice Blog, well written !!!


      Nishan Dev

      Author's profile photo Former Member
      Former Member

      Thank you for reading. Rate it and share it if you like it 🙂

      Author's profile photo Luke Marson
      Luke Marson

      Hi Greg,

      This is a fantastic blog and I think you point on so many excellent points. There really is a huge disruption taking place and it is a gradual movement. In the last 15 years we've gone from few people having a computer, to most people have a portable-computer (Smartphone) that is permanently connected to one big network. When I grew up my school didn't even have a network, and I'm not particularly old. Or old at all 😉 .

      So much change is happening and the way IT is supplied, consumed and controlled is moving away from traditional methods and putting power in the hands of businesses and consumers. When I say businesses, I mean the people running businesses - the people who used to rely on IT people to supply them with methods of running their business. This situation will no longer exist in the way it is now within a few years. As you pointed out, we're already seeing this shift now.

      Best regadds,