I like to think of this as a globally emerging service economy. One interesting effect of this is the possibility for one-person orchestrated businesses to emerge in the everything-as-a-service paradigm. In principle, with a $20 Raspberry computer and a MasterCard, one can already orchestrate a business with economy-of-scale production facilities, supply chain, sales and marketing without major capital investments and compete on the global market.
This is about businesses and entrepreneurs taking advantage of the new market dynamics derived from maturing information technology concepts – changing the dynamics and consequently the business models required to compete. Manufacturing companies could potentially sell excess production capacity in their factories as a service, increasing overall utilization and efficiency. Logistics businesses like A.P. Møller – Mærsk, DHL, FedEx, TNT Express, etc., could sell excess capacity in globally reaching logistics networks. Sales and marketing companies could sell services for marketing and sales in the global market where access to networks in regions and countries could help ensure success in client interaction where a product or service is consumed.
Considering that such a scheme could be crowd financed, and the credit card controls access to funds contributed by thousand of individuals across the world, makes this even a more attractive scenario – business as a service.
Just imagine the velocity and dynamics enabled by the service economy, bringing time, range and ease of business to new and unprecedented levels. There are several technology enablers on the horizon that will enhance our capabilities in building a truly agile enterprise, including:
- Machine-to-machine automation in business-to-business interfaces
- Internet of things – connected sensoring and mobility, enabling new, more sophisticated automation of processes and services in B2B and business-to-consumer interfaces
- Flexible, skill- and knowledge-centric employment patterns, allowing businesses to improve their core cost models (such as crowdsourcing)
- Innovation and client-perceived value of services, increasingly depending on enterprise ecosystems and IT operating models to sustain them
The economies of the world are of course responding to these technology-enabled opportunities, and efficient adoption is now accepted as a core growth strategy in most Western economies. In Europe, most nations have implemented programs that are building out technology infrastructure that can sustain the new service economy. It includes broadband access for all, digital roads and transportation systems, public service integration and digitalization, efficient and smarter energy production and distribution systems, etc.
However, there are some areas related to controversial issues such as privacy, security and information integrity that remain challenging as common rules and regulations are absent. As recent revelations from the Snowden affair have shown, even rules and regulations that exist can be compromised – i.e., we do not have a global, credible enforcement capability that can cope with the realities of the digital economy. This fact increases risk and uncertainty among stakeholders, constrains investments, and eventually prevents progress and growth derived from these new technology-enabled capabilities.
Neelie Kroes, EU Commissioner and Vice President for the Digital Agenda recently wrote about this topic, calling it a “crisis” and encouraging “industries and governments to make structural reforms and at the same time to embrace digital technology to the full”. These are not just empty words from just another eurocrat. The European Union is in fact investing €80 billion in its Horizon 2020 R&D program, of which a substantial part is related to information technology. The European cloud strategy alone is expected to deliver 2.5 million new jobs across EU with an annual boost of €160 million to the EU GDP. It is also aimed at resolving many of the above-mentioned challenges, introducing programs that in their essence are the foundation of a single services market in the European Union. No, it is not a global program, and won’t be global to begin with. But it will matter for every business exposed to the EU economy.
We can already observe the pressures of the powerful mix of globalization and digital economy play out as the lack of common rules and regulations inhibit fair and just taxation of businesses. Of course, the regulatory grey zones can also be seen as opportunities for businesses to expand rapidly into new markets, outcompeting traditional and local businesses based on traditional modus operandi.
What does this new and emerging service economy mean to today’s enterprises and their technology investments? In this blogging series, I will discuss in more detail the challenges we see in topics such as the emerging enterprise ecosystem; the prosumer ecosystem; the changing B2B, B2C and B2E interfaces; mobility and flexible employment patterns; and the evolution of new enterprise information security models – all with a slight bias toward the business and technology strategy implications involved in building Enterprise 3.0.
Cato Furum is General Western Europe Chief Technologist for HP Enterprise Services. He provides thought leadership, direction and guidance to HP’s clients on how technology can be used to enable breakthrough business innovation.