The industry is dead. Long live the tech company.
Enterprises must define themselves by technology, not industry, as we head into the 5G economy.
Ever since the late 1990s, Jeff Bezos had been claiming that Amazon was a technology company pioneering e-commerce, not a retailer. However, Amazon looked, smelled and walked like a retailer. It was the emergence of AWS in 2006 that finally allowed Amazon to unquestionably be considered a technology company and fulfill Bezos’s original vision.
Twenty years later, it is now vital for every company to first and foremost define itself as a technology company (a theme often reserved for Tesla). Lyft is not a taxi company, but a technology company that enables transportation experiences. Nike is no longer a sports apparel company, but a technology company that enables athletic experiences. Even McDonalds has begun the transition from a fast food restaurant chain, to a technology company that enables dining and drive-through experiences.
So, in accordance, those in the enterprise technology space must stop thinking about selling IT systems to service providers, but rather realize that we’re selling digital business enablement to aspiring technology companies. While these shifts may sound like marketing speak at first, these companies and several others have showcased a firm technology focus by way of their market offerings and investments, embracing technology as the primary means for business differentiation.
McDonalds – enabling dining & drive-through experiences
Gone are the days of generic customer experiences and traditional supply chain for the $150 billion fast food trailblazer, as evidenced by its recent acquisitions of personalization company Dynamic Yield (2019, Israel, $300m) and intelligent voice-based conversation company Apprente (2020, US, undisclosed). McDonalds is planning to use AI-powered omni-channel personalization to deliver “Amazon-style” drive-through experiences, where customers will be able to view their own customized screens (or menus) as recognized by drive-thru sensors and based on their ordering history. As Jeff Bezos famously said in Amazon’s early days, “We don’t make money when we sell things. We make money when we help customers make purchase decisions.”
Nike – enabling athletic experiences
Nike’s dominance of the world of sports apparel has long been symbolized by its famous swoosh logo and endorsements from the world’s best athletes, from Michael Jordan to Tiger Woods. But today Nike has arguably become the world’s most dominant technology fitness platform as well. The Nike App, which began as a mobile fitness app five years ago, has now evolved into a more robust members-only style personal assistant. The Nike App collects real-time data from both training apps and “smart” clothing (with embedded sensors that monitor body conditions) and integrates this into its users’ fitness lives with customized apparel recommendations, fitness regimes and training insights, and even local events and fitness communities.
Lyft – enabling transportation experiences
Hailing a taxi was once considered a romanticized artform perfected by New Yorkers, but companies like Lyft have been making this obsolete via personalized, convenient, and on-demand experiences for its riders, all enabled by technology. Lyft has gone the extra mile (pun intended) with its technological innovation, including examples such as its open-source platform Istio (together with Google and IBM) for managing and securing microservices, and edge computing proxy Envoy for decoupling the network from its applications (i.e. simplifying error detection). And this is only the beginning for the Lyfts and Ubers of the world, as they continue to penetrate new forms of transportation, from electric bicycles to drone taxis.
These examples showcase this paradigm shift more substantively than ever and are putting not only their competitors but entire “industries” on notice. There’s no room for complacency in an era where technology has become the primary enabler for user experience and business success. Every company must be devoted to becoming a technology company, as technology has undoubtedly become the engine that drives new business innovation
What about telecom?
Telecom was disrupted long ago in the form of WhatsApp, Netflix, Twilio and others, and has been forced either to embrace commoditization, set up for acquisition, or evolve into technology companies across the world. Rakuten is a prime example of a “future-telco” that has solidified itself as a technology company, enabling a variety of experiences for its user base, including mobile, streaming content, e-commerce, sports & leisure, payments (“R-pay”) and even different financial services.
We at Nokia are proud to call innovators like Rakuten our customers, working together as two distinct tech companies toward the 5G economy.
As for Nokia, this means the context of our conversation had to undergo an evolution - we as a tech company enabling another aspiring tech company. And this required focusing on new set of differentiators, those of agility, openness, innovation, and culture, to name a few. To quote one of the most successful disruptors of the past 10 years, Twilio CEO Jeff Lawson, "Today's differentiation is primarily through experience, as products themselves have become mostly commoditized. Businesses must set up environments of innovation that are founded on learning quickly, with intermittent milestones that allow them to keep evolving."
In a similar tone, Tareq Amin, CTO of Rakuten Mobile, speaks about the adaptability and flexibility of working with Nokia. “Rather than being wedded to conventional thinking, Nokia has embraced our vision of how cloud and connectivity technologies can be combined in a compelling way,” he says. “As we prepare to upgrade our network to support 5G and the needs of enterprises, our fruitful relationship with Nokia continues to expand and evolve.”