Last week I heard a stunning speech from Prof. Dr. Gunter Dueck in Hamburg. As a former IBM manager, he has talked about digitalization for decades. During this speech, Dueck boldly stated that the businesses in Germany—from small to gigantic—are resisting change and development, as they always have. He mentioned a senior Daimler manager who made the statement that Mercedes Benz cars will have steering wheels for the next 50 years. In the wake of emerging self-driving cars, Prof. Dueck was quite amazed by this kind of statement. And yet he affirmed that most managers are change-averse. He mentioned how managers of even large companies once thought the internet would go away because they believed it was just hype.
Within the past year, I visited computer and manufacturing industry conventions in Germany and the US. Of the people I spoke to, many still have the notion that the trends we clearly see today will not affect them. The word I heard most often was “hype.”
- IoT is Hype
- Cloud is Hype
- 3D Printing is Hype
- Digitalization is Hype
- And so on
What does “hype” mean? It won’t last. It will go away. Not to be taken seriously. Here is how the Dictionary.com defines hype:
- exaggerated publicity; hoopla.
- an ingenious or questionable claim, method, etc., used in advertising, promotion, or publicity to intensify the effect.
- a swindle, deception, or trick.
Origin of hype (1925-1930): Americanism; in sense “to trick, swindle,” of uncertain origin; subsequent senses perhaps by reanalysis as a shortening of hyperbole
Many people I’ve met actually consider Digital Transformation to be hype!
Imagine people who don’t take reports of an impending Tsunami seriously because the water seems to have disappeared from the beach. They say, “See, the water has disappeared! Obviously, this was just hype. Please stop disturbing me!” What they don’t know is that before a Tsunami hits the coast, it consumes all the water at the coastline to build a 10m tidal wave!
By the way, Google search trends show this “tsunami” quite well. Users started searching the terms “Digital Transformation” and “IoT” with some significance at the beginning of 2015.
The big question is how can we persuade people of the huge paradigm shift that digitalization is actually happening? Prof. Dueck said that we have been trying to digitalization for many years, but have not achieved nearly as much as was possible. He also said we still neglect to do what is necessary for this to happen.
I personally believe that this lack of belief and, therefore, change is due to some kind of inertia in business. Many managers ask these and other questions:
Why change something that has been working for many years?
Why use cloud systems? We were doing just fine with our on-premises IT.
Plus, using new technologies presents risk. Who wants to be made responsible if nothing changes or if it all turns out to just be hype? Some hoped the internet would go away. That will never happen, obviously. Purists wanted digital photography to go away—analog photography is real photography! But…do you remember Kodak? Some said that Android will not be a big player. Do you remember Nokia? Great mobile phones then. But…gone. One more: do you remember the “Palm Pilot”? Again: gone.
“But what is this good for?” asked an engineer of the Advanced Computing Systems Division of IBM in 1968 regarding the microchip.
In order to understand the change, we have to have a look at startups. They don’t bother investing in data centers and servers, expensive software that presents a major initial investment, or complicated storage systems. They don’t even invest in production facilities in the beginning (they send data to a company that does the production for them).
I had the chance to talk to some Autodesk managers while attending the Accelerate 2016 convention in Boston this September. One of them stated that the innovation power—that is, using cloud systems, managed services, and 3D printing—is highest on the East and West coasts of the United States. In mid-America, you’ll find more conservative forces, even among startups. This is the same in most parts of Europe.
While in Boston, I had the chance to talk to Stephen Ambrose, Founder and President of Asius Technologies. He designed and built his products—special earbuds that prevent deafness—to be fully digital because of his belief in the necessity of Digital Transformation. Ambrose successfully integrated these earbuds with cloud based 3D software, Autodesk Fusion 360, 3D printing, etc. He told me that without 3D printing, he would not have been able to develop his products in such a short time. This is a brilliant example of Digital Transformation. I plan to interview him and write about his digital voyage.
Here is yet another interesting quote:
“I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year.”
– Editor of Prentice Hall Business books, 1957
Follow this link to read 8 Spectacularly Wrong Predictions About Computers & The Internet.
Step back from your possible prejudices and habits of thinking. Take into consideration that a huge number of inventions have made it into our daily lives despite so many people initially rejecting the them.
Let’s look at what we face right now and make some predictions for the future:
- In 25 years, self-driving cars will be standard and individual cars—steered by humans—won’t be allowed in cities and on major roads. They disturb the order of self-driving vehicles. Millenials aren’t eager to own their own cars. Automobiles meant freedom for Baby Boomers and Gen Xers. For Millenials, the smartphone means freedom.
- In 10 years, Additive Manufacturing (3D printing) will have replaced 60%-70% of subtractive manufacturing (drilling machines, lathes, mills etc.).
- In 7.5 years, 75% of businesses use managed services and cloud systems for their critical business processes. Sales of storage and servers for SMBs will drop dramatically.
If we assume that this is really our direction, how can we not act now? What will businesses do that are not prepared? McKinsey states in his report, The Internet of Things: Mapping the value beyond the hype: “Our central finding is that the hype may actually understate the full potential.”
Let’s be clear:
- 3D Printing will not go away
- Internet of Things will not go away
- Cloud systems will not go away
- Self-driving cars will not go away
- And: The Internet did not go away
Let’s roll up our sleeves and start working on Digital Transformation now. Those who follow this suggestion are the ones who will lead the market and survive. It is all about imagination!
The purpose of this blog is to start a discussion. Please leave your comments, whether you agree or if you disagree. I hope to hear from you!