The combination of cheap sensors and affordable computing capacity in the cloud is changing the way organizations produce, store and work with data. We are now able to generate, store and analyze information in real time at a scale that was impossible just recently – allowing detecting patterns that were previously hard to discern. All of this has a significant potential economic impact. According to IDC, a consultancy, worldwide the field that IDC called Big Data Analysis (BDA) was already estimated at close to 4B in investments in 2014 across the financial sector, 3.6B in manufacturing and short of 2B in retail and wholesale.
This type of innovation will also raise questions that go well beyond the technology itself.
The borders between industries are already fading. Manufacturers – say, car makers – have been using and integrating software for a while, as have banks and retailers. However, in the past decades the gains came mostly from the internal efficiencies that software allowed these organizations to achieve, or from product innovation.
Over the coming years, public and private market places will enable companies to package their own processes and knowledge, if they so choose, for re-sale or sharing. In other words, we can expect businesses to shift from being technology users to technology providers - a transformation somewhat similar to what many businesses saw in the ‘80s. Healthcare or manufacturing groups may start to sell their coded processes in the form of industry applications; education firms and retailers may offer aggregate trend data on student or buyer behavior. For the new digital companies, this will be a change in business model.
Once that happens, competitiveness will likely hinge on the ability to combine different processes and insights effectively, build and maintain trust, and act with local relevance. Companies will probably thrive either when operating at scale, or at the far end of the long tail of specialization.
The result may well be comparable to what we see today in the financial industry, where personal information has to be safe-guarded but economic data, risk ratings and even credit ratings can and sometimes must be shared. As in the case of drones and self-driving cars, it is likely that ethical questions will arise and the legal framework will struggle adjust, so that industry associations will have a vital role to play.
"Over the coming years, public and private market places will enable companies to package their own processes and knowledge"
Change will also happen within the company itself. Relying on data could transform the way products and services are designed, with the potential for smaller, more frequent adjustments. This could mean less reliance on board-level decisions, and more delegation to the front lines. Other areas, such as customer support and marketing, will also shift towards either more centralization – where the data is analyzed – or more de-centralization – where it is available. Different companies may explore shifting in either direction.
It is possible that our approach to risk management will also be revisited and systemic risk –anything from labor safety in construction to financial solvency in insurance –becomes more codified. This may be beneficial overall, but increase the risk of “black swans”, so strong checks and balances will be needed both at company and industry level.
Needless to say, safety will continue to be key– security, privacy, compliance and transparency, among others. In this context, ledger technology and its successors are likely to increase in relevance.
Headquartered in Redmond, U.S., Microsoft [NASDAQ: MSFT] provides various cutting-edge solutions to its customers across 170 countries. Founded in 1975, Microsoft enrolls its client with various cloud solution to map them in this growing tech-savvy generation.