Why IT companies are so concerned by latest (and future) USA administration moves.


Latest USA administration moves are rising a lot of concerns towards the IT community, and a lot of concerns worldwide.

There are, of course, different sentiments related to political beliefs, ethics and moral considerations that should be considered. I will not enter here in the political, ethical and moral arena to present my personal point of view on the specific subject but I would like make some considerations on the IT sector reactions to what is happening.

It is an easy prediction that the future economic outlook will be impacted by USA administration approach and actions, and this can cause understandable reactions on the various stakeholders.

It is interesting to note the different approach from companies that need a global market to survive, as the technological ones, and the ones that rely on local and few other markets.

This difference is, nowadays, more evident on the IT (SW, HW, Services) sector, a highly technological and advanced area that has 2 important needs:

1) highly qualified and skilled personnel

2) a global market to act on

Setting aside the ethical and moral considerations (which are, don’t get me wrong, imperative to anyone), from a business point of view there is no doubt that some markets (as the technological one) need globalization more than other to prosper and survive.

The IT market, although, cover a critical position here, since it is the engine of the 4th industrial revolution and it is facing, as of now, a growing resistance from the older economical model players; comments and reactions I have seen on various platforms are mostly expression of this growing sentiment.

The IT market needs, market historically leaded by USA companies, has been able to growth thanks mainly to innovation, openness and intercultural exchange.

People working in this sector belongs to different ethnic groups, countries and religions bringing, due to this diversity, high value thanks to their experience and approach. In order to create something new (which is what all the Information technology industry is about) a different approach to things is needed. It is not a case that the IT industry in USA has historically found in the open approach (in terms of market and human resources) a tremendous advantage which brought USA to lead the IT market.

IT CEOs are understandably concerned that the environment that made them prosper now can change dramatically. USA administration announced economic protectionism and other rumored or in place actions (last but not least the improperly so called “muslim” ban) could, as a matter of facts, harms those company’s ability to growth and prosper.

In this view it is totally understandable the concerns of important CEOs towards the present and future actions of USA government and the need to address those concerns openly in public.

If, as rumor says, one of the next moves will be to target H-1B visas (working visas) this will heavily affect those companies that will be forced to rethink their approach to the technological market may be forcing them, as an example, to move R&D facilities to more friendly shores.

The truth behind this is that the need for qualified people in the IT sector is still growing to a rate that there is no single nation, nor even USA, that can provide the resources needed to back up this development; therefore the need for qualified and skilled people coming from virtually anywhere is imperative for this sector.

Like it or not some political issues does affect the economic of some sectors, therefore is absolutely understandable that the technology market reacts toward an approach that can undermine its chance to grow, expand, and ultimately bring value to a country in terms of economic wealth and image.

It is worth to notice also that the IT sector is changing, the technologies are shifting from products to services that need a worldwide market to be remunerative. From Cloud to IoT, passing through security and Big data all the recent technology trends calls for the most open and widest possible market.

But there is another factor to take into account; the consolidated IT technologies that need a limited innovation approach are now offered also by emerging competitors in countries outside USA as china and others.

Even if not ready to provide, in most cases, a disruptive technologies advance those companies are able to produce, in the consolidated technology market, a stable product implementation and constant improvement in a price\competitive fashion. Quality issues in consolidated technology fields are a minor concerns since products tend to be aligned.

If we add the geopolitical issues that lead, as an example, some countries to start looking for alternatives to USA products (China, Russia, Pakistan, India are an example, but understandable the middle east area in the future) the picture is more clear.

This is not politic, but economy.

One further economical consideration, the inevitable shift to a so called “data economy” (the real meaning of the 4th industrial revolution) is something that should be driven. Closing the economy to the old models although make you feel in your “comfort zone” will just retard the inevitable, creating more later costs to adapt.

But there are also ethical and moral consideration to be taken into account, and most of those CEO for once demonstrate that business and ethics can match, probably due not only to their business but also their heritage.

Kudos to Satya Nadella , Brad Smith, Sundar Pichai, Tim Cook, Mark Zuckerberg and the others that put business and ethics as a matter and speak out.

Antonio

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Why IT companies are so concerned by latest (and future) USA administration moves. was originally published on The Puchi Herald Magazine

The IoT Files – Business Models


The IoT Files – Business Models

Ok we talked about security, privacy and infrastructure in the last post Here we are.

do we really think that IoT will work in the current business model environment?

Well I have to tell you, probably it would not.

The key factor of IoT will be if it will be able to generate revenue? the problem of revenue is related to the fact they should cover the infrastructure costs, in order to do so, since we already seen that infrastructure costs will be big, as well as security, privacy implication that have, also, a cost, selling devices will not be enough.

And selling the device, per se, could not justify the costs the user will have to deal with for connection.

So to make IoT an attractive success, and not a marketing bubble, we should rethink our business models and various levels.

Old Telco model is out

The first to pay for the revolution will be the telco provider. Telephone companies are struggling even now in the effort to survive digitalization. the expensive infrastructure created to teal with voice communications are becoming rapidly obsolete. New digital provider are eroding the classi telco area. Think of the digital company that go through data (wechat, skype, whatsapp, line just to name few) and offer also voice services.

The telco model is so out that even big content providers as Google and Facebook are trying to overcome their limitation starting to consider to offer connectivity.

But telco model has been created in years, and now generation of managers that grown up there have great resistance to rethink their role.

The New Data Paradigma.

The truth is that the new business model should start form the new data paradigma. It is data that matter, and the rest is just a companion.

We keep calling them phones, but smartphone are used 99% to transmit data, digital data, every day less and less to make voice communication. the reason is that voice communication can’t provide the same level of experience that data can.

So data will be more and more important, in terms of quantity and quality. this is already a reason to concerns, but we should start to learn how to deal with it.

A big mistake would be to consider data as a gray amount of bits all the same, in this model (an old model) we can simply make to pay you the bandwidth you consume. But in IoT the data are not all the same, and we will not be able to justify to pay (and offer the same service level) to medical data and chat.

As well as in critical segment as automotive, or scada control we can’t think we can just reason in terms of amount of data.

So Data will require a new approach, because all data are important, but some data are more important than other.

From Product to services

as well as data is nothing if not associated with a service. In the IoT environment services that manipulate data will replace products.

If data will be the object of our interest, than product will be just a media to obtain the service, the cultural shifting is to a box moving environment to a service one.

But this require a different approach on selling, measuring, marketing all this. Isn’t it a big change of the business model?

The Big Marketing Imperative

Marketing will become way more important, because it will be mandatory to understand the mood of the customers to offer and modify services accordingly.

But at the same time marketing will be the most interested entity to collect and analyze data, so marketing will become more important even than finance guys, something  would really see, a Marketing manager shouting a CFO in a board meeting….

Roaming, connectivity and other hidden costs

meanwhile in the transition to the IoT we will have to face how hidden cost could impact the new world.

Think, as an example, to roaming costs: I travel a lot, and when abroad I can be asked to pay till 18 euros for 1 MB of data when abroad…. this will be not possible in IoT, and basically unthinkable right now.

I do what all the other do in this case, don’t use roaming for data and try to find wifi hotspots able to provide me data connectivity I need.

Or buying a new sim card in the place where I am.

But if I will use dozen of different devices this could become impractical. a cost is not just the money you have to pay, but also the value you lose for some reason. so basically every time I can’t use my devices the way i want, it is a cost, an hidden cost, that sooner or later will be taken into consideration.

All those hidden cost have to be taken into account in a new IoT business model.

B2B, B2C and more?

This could lead us to say hello to the old B2B and B2C characterization. IoT will require a different approach where the interaction between consumer and business will be more complicated. we will probably have to go beyond B2B and B2C for a X4Y and something more ….

 

Who Pay all this?

Everything change, so business models, but every change create reactions and costs. As for infrastructures we should ask ourselves who will pay for this?

the biggest problem is that at the moment we have a lack of knowledge on what we will face, and using the standard metrics can drive us into wrong conclusion.

But this is the object of the last post for this introductory analysis of IoT. the Cultural impact of IoT.

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The IoT Files – Business Models was originally published on The Puchi Herald Magazine

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