At one of the recent conferences that I attended, I heard on how technology is disrupting and changing traditional business models. I could not help but resonate.
Today, traditional business models are completely being disrupted by technologies in "Cloud", "Big Data" and "Mobility". The traditional business models have been very mature for the last several decades and any deviation was considered implausible. Yet, with the advent of Cloud technologies and deployment models, with the new ability to extract, process large amounts of data cheaply (from "structured" and "unstructured" sources) on a real time basis and with the ability to easily to consume & visualize the processed information on a plethora of mobile devices, a perfect storm has been created in disrupting the traditional and existing "mature" business models.
The case is not just with a particular industry. In fact, any industry that you look to is facing this disruption.
Let's take a look at what has happened with the music industry. For the last six decades or so, music has been produced and consumed in a typical model - the music company would hire an artist, they would produce the music, then the media and then market, distribute and sell the media to the consumer. For the consumer there was relatively little choice or rather limited access. If you wanted a popular song, it was usually out of stock and if you wanted an obscure song it was never on stock. Of course, the format of the media changed over the years - from LP records, to tape cassettes and to CDs, but the so called "mature" business model remained the same.
But then something dramatic happened and in less than a decade everything changed. In 1995, MP3 was born - it was the raw data for music, the simplification of data and compression of data at-least by 10 times in a digital format. A few years later, in 1999, Napster went live which allowed for illegal peer-to-peer file transfers that resulted music companies to file several lawsuits. Two years later, Apple created iPod where you to store large number of songs onto a small device and then two years later, it created iTunes that allowed for online legal download of music. For the first time in the history of the music industry you could download a song for 99 cents. Today an iPod can hold 40 thousand songs and iTunes has crossed 20billion downloads.
So, what really happened? MP3 resulted in "simplification of data", Napster was the "simplification of value-chain" and the iPod was the "simplification of consumption" which created a perfect storm in an existing business model.
This was a technology led disruption of a major kind. For the consumer, this led to a tremendous increase in value creation - not only you have online access to all the music in the world at your fingertips but you could follow the playlists of your friends with great taste in music and give you much more and varied options, interacting and sharing music, than you've ever done before (think Spotify). The music company no longer had to produce the media, distribute the media and incur costs in storing the music. The marginal costs to bring a new piece of music to millions of customers became zero. This gave a dramatic higher value to the customer at a dramatic lower cost, driven by a technology led disruption to the existing business model.
The same technology led disruption is happening in every other industry - Retail, Manufacturing, Fashion, Healthcare, Life sciences and others, and changing traditional business models. Big Data technologies are bringing in "simplification of data", Cloud is simplifying the value-chain and Mobility is simplifying the consumption of information. Industries cannot afford to miss the opportunity of dramatically adding more value to consumers (and at significantly lower costs) and are looking at Cloud, Big Data and Mobility technologies towards remaining competitive in the market.