At last year’s International Consumer Electronics Show (CES), iPads and tablets were all the rage, and that’s what made the newstream on newsites and blogs. But industry-watcher Vinnie Mirchandani picked up something even more revolutionary from the show, something that went unpreported: the list of exhibitors included many non-technology companies. In his latest book, The New Technology Elite: How Great Companies Optimize Both Technology Consumption and Production, he shares some of the newcomers to CES:
- Walgreens, the pharmacy chain, demonstrated a refill app that enables consumers to scan bar codes from previous prescriptions.
- Whirlpool, the appliance maker, showed off its washers/dryers with LCD screens, as well as its latest line of apps addressing stain removal and laundry questions.
- Nike introduced its GPS-enabled Sportswatch developed in partnership with Tom Tom.
- Ford unveiled its electric car, the Focus, at CES, rather than the Detroit Auto Show.
- GM demonstrated its latest update to the OnStar system.
The list goes on, and points to a trend both Vinnie and I have been watching in recent years — the blurring of the lines between technology providers and consumers. Vinnie’s message in his latest book is quite simple, yet profound: tech-savvy companies – whether they sell insurance or airplanes – are becoming tech vendors themselves.
The examples are becoming too numerous to mention. Last year, for example, Lockheed Martin, the aerospace company, announced BlackCloud, a secure turnkey private cloud solution for government agencies designed to minimize risk while addressing compliance and mission requirements. BlackCloud integrates Lockheed Martin’s architecture with solutions from Cyber Security Alliance partners Cisco, NetApp, and VMware to offer secure multi-tenancy in the data center. The total solution provides end-to-end segmentation of a cloud computing environment while offering the economies of scale customers seek to reduce infrastructure costs.
In The New Technology Elite, Vinnie talks about UPS, described by its CEO as a “half transportation company, half technology company.” The company has one of the world’s most sophisticated and powerful tracking systems, and manages more than 10 petabytes of data.
InformationWeek’s Rob Preston points to this trend as well, observing that “many non-IT companies have patented, trademarked, or copyrighted at least one tech innovation.” Rob points out that Ford operates one of the world’s most sophisticated supply chains, while Amazon, an Internet retailer, is also the IT platform for the world. And there are others: “Scores of companies, including NYSE Euronext, Sears, United Stationers, The Associated Press, Zynga, Google, and Union Pacific, not only are innovative users but also committed builders and sellers of IT systems, software, and services. NYSE Technologies, for instance, is pitching a range of transaction, infrastructure, and data services and software, mostly to other financial companies. The MetaScale unit of Sears, launched in April, aims to sell Hadoop and other big data management services to “traditional brick-and-mortar enterprises” across all industries. Union Pacific, the largest railroad company in the U.S., now generates $35 million to $40 million in annual revenue by selling, leasing, and licensing various technologies it owns and/or develops.”
Of course, being a technology company is a double-edged sword. The technology industry is fast-moving, and what’s new today may become obsolete a year from now. A software company CEO once put it to me this way: if a tech company isn’t growing by more than 25% a year, then it’s standing still, and standing-still companies don’t last long in the tech space. The software industry is littered with failures who couldn’t keep up with shifts in the ground beneath their feet, in fact. Vinnie, a former Gartner analyst and PwC consultant, outlines the challenges of being a technology vendor, and why many companies may not be ready:
- Get used to technology product half-lives: Technology products don’t stay “new” very long before it’s time to move to the next version.
- Adjust to Moore’s Law: While prices of technologies plummet from year to year, their power and capacity doubles.
- Rethink product documentation: “In a world where no training is needed to navigate Amazon.com and any ‘live’ help is a keystroke and online chat away, companies still ship products with clumsy, printed product manuals,” Vinnie points out.
- Understand technology law: A whole field onto itself, with patents and intellectual property claims.
- Get used to competition from left field: A company such as Whirlpool, which historically looked at companies such as GE and Sears as competitors, will find itself suddenly competing with electronics companies such as LG and Samsung.