Dateline Davos: The Future of the Technology Sector
Yesterday I had the good fortune to moderate a Davos session on the future of technology where the panelists were Bill Gates, John Chambers, Eric Schmidt, and Niklas Zennstrom. For those interested in the full record, there is a podcast on the World Economic Forum website.
The premise of the dialog was that we needed a new framework for thinking about the future of technology for two reasons. FIrst, technology issues are no longer confined to technology companies--they have equal or even greater inpact on the technology-enabled sectors. It's not just about IT anymore; it's also about telco, financial services, media, advertising, retail, pharmaceuticals, supply chain and logistics, with many more in the queue. So we need a broader understanding that shares a common vocabulary across these sectors.
Second, Moore's Law--the model that for twenty-five years was the most effective at explaining how technology evolves-- is losing its explanatory power. Up until about 2000, you could pretty much explain the state of every element in the technology sector by pointing to how semiconductor capabilities would increase 10X every few years, thereby obsoleting all the design assumptions underlying the current generation of systems, and driving wholesale replacements. But now we have so much legacy from past waves of innovation, infrastrucutre displacement is no longer in the cards. At the same time, the impact of the Internet has shifted a lot of our focus from product models to service models, which only indirectly correlate to core technology advances. In short, Moore's Law still applies, but it no longer explains the full range of what is happening in tech.
So what would? After 45 minutes of very enlightening discussion, we generated three principles that, taken together, I will offer as Release 0.8 of a new explanatory model. They are:
1. The core enabling resources of IT--computing, memory, bandwidth--are asymptotically apporaching zero. For scenario planning purposes, assume they are free. (This is where Moore's Law continues to have its impact.)
2. Expect the digitization of everything. Either digital format will substitute for a prior analog reality, as in media, or it will serve as a proxy for the underlying reality, be that a natural resource, a customer order in transit, or a physical meeting. This allows for the full repertoire of computing to be applied to value creating metamorphoses, whether it be enhancing sensory impact, improving consumer experience, detecting change triggers, or the like.
3. Expect the value proposition of IT to migrate from enabling transactions to enabling interactions, whether it be in customer service applications, design collaborations, or self-calibrating sensor-enabled systems. This allows for iterative processes to have shorter and shorter cycle times, resulting in better understanding, faster time to market, more reliable operations, and the like.
The test to apply to these principles is to ask to what degree they explain the changing impact of IT on business and consumer processes in your sector. If they don't do a good job, I'd be interested in hearing why not; and if they do, I'd like your feedback on how they can be made even better.