When I began this blog in October of last year, my goal was to help readers understand both the magnitude of the digital transformation currently underway and its implications for companies and IT professionals in every industry. In particular, I focused on the role of the network in enabling digital business and best practices for transforming the network from a cost center to a growth driver.
This is a subject near and dear to my heart because the networking industry has been my home for many years, and it has seen a lot of change. Come this fall, it’s likely so see a bit more. Last November, my company, Brocade, announced that it is being acquired by Broadcom Ltd., and in the next few months, that transaction is expected to be completed. I’m a perfect example of the fact that you can never fully predict how things will change; you can only know things will change. So I want to wrap up this blog series with a look back at some of the most important things you need to consider today to make sure you’re ready for whatever changes digital transformation may send in your direction.
For starters, stay up-to-date in your knowledge and skills. Change brings new opportunities, and if you’re skills are current you’ll be ready for it. If not, you’ll be left behind. If you can’t make the investment on company time and budget, then do it on your own. Our skills are superpowers that we carry with us, regardless of where our career takes us. Nothing will make a bigger difference in your career and your marketability than an investment in yourself and your own relevance.
Second, the network should be a platform for business automation, innovation and growth. Use your influence to help your company make forward-thinking changes to your network needed for digital business. There’s really no time to waste. As we’ve discussed in this blog series, your network will either be your biggest asset for growth and wealth creation, or it can be your biggest hindrance. There are a number of reasons for this, but here are the five most critical ones, along with the questions you should be asking yourself about your own network:
Laws of networks are beginning to govern business models and even global economics. When you understand these laws, you begin to understand why we live in a world where new network-centric business models (think Google, Facebook, Amazon, Airbnb, etc.) become de facto monopolies that result in incredible wealth creation. The compounding value of network effects are not only about exponentially increasing connections, but also the ability for groups of these connections to form independently, to collaborate and share information and create value for themselves and others. By studying and understanding the enormous power of network effects, you can consider how to put them to work for your business in increasing customer and shareholder value.
And if you work for a company whose primary value has come from offering traditional goods and services, remember that network effects matter to all businesses. Be encouraged in knowing that any business can offer value through network effects. As one example of inspiration, Nike has established a large cohort of athletes who support and encourage each other through their Nike+ run club app, which has tens of millions of subscribers. If you look around, many other examples abound.
So, don’t give up; it’s too important. Ways to tap into network effects to build the value of a business are as plentiful, I would say even more plentiful, as the large number of business models now sustaining companies in our economy.
Ask yourself: where is there value in customers connecting to each other? And, keep asking until to see your opportunity in creating a way to help them do just that.
Delivery of value has now moved beyond simply connecting customers and enabling them to form groups; the most profitable companies now enable co-creation with and among customers. Put simply, the value of their product or service is co-created by the people who use it. Facebook is the most obvious example of this. We are the product. Facebook just provides a platform. Its customers create all of the content and thus create the reason to engage as well as the value of the platform. Without us, there is no reason to be on Facebook.
If you haven’t figured out how your customers create value for each other and how that co-creation advances your business, you’ll be left behind as soon as another company begins to transform your industry. This is what happened with hospitality, ride sharing, gaming, and other industries. You may have to re-think your products, services, support model, partnering strategy or all of the above in order to allow customers to co-create value, but it’s essential that you determine what co-creation means in your industry. The more people that connect and use the product, service or platform, the more value for everything. So, if you’re not first, you’re last. When you put co-creation together with network effects, they tend to produce a natural monopoly and high margins.
In thinking about how your organization can underlie co-creation, ask yourself: where is there worth in customers creating value, and how can you provide a platform or mechanism that enables them to do this?
In his book The Seventh Sense, Joshua Cooper Ramo makes the thought-provoking statement that networks compress time. Nowhere is this more visible than with Amazon. Amazon reportedly releases more than 20,000 new features, capabilities and services to their customers a day, making changes to production every 11 seconds. Facebook does multiple releases a day, and Google does a large package of releases every week or two.
These companies have created a huge advantage—a time advantage—and they use it with often-devastating effect to innovate faster than their competitors. And not just a little bit faster, not just twice as fast, or 10 times as fast, but orders of magnitude faster. This means faster to customer services, faster to customer value, faster to revenues and profits, even faster to failure. In business, controlling time is like controlling the air space in a war where everyone else is fighting from the ground. It’s a big advantage, and it’s delivered through the network.
So ask yourself: what are the updates we could make in our processes, systems and infrastructure that would have the most impact to deliver change more quickly?
The network touches every critical component of business growth, including products and services, data, business process, sales and marketing, and customer experience. To be successful, you’ll want to want to create an environment in which your company can quickly create new products, features, services and value for your customers—and in which your customers and partners can create that value for each other. You need a platform for rapid business innovation to build new stuff fast for your company and your customers, and most powerfully, where your customers can create for each other.
You need the same capabilities for innovation as the early leaders in the digital economy. They change, add, delete, mix and match at will to enable new services, new customer features, even new business models on the fly. They try, learn, iterate, tune and optimize over and over and over, thousands of times a day. This creates an enormous competitive advantage in innovation speed, learning speed, and time to revenue.
Ask yourself: what do I need to change in my infrastructure to support rapid innovation in my organization?
Cloud services, mobile applications, IoT, security enhancements, big data analytics and new business models can’t thrive on the old IP infrastructure that was designed two decades ago. The classic IP networks that support everything today were simply not designed to meet the needs of the connected world that is emerging. Today’s world of computing and connecting is dramatically different and requires a different kind of network architecture: a New IP network architecture.
What is a New IP network architecture? It does for the network what the agile development model did for software. It takes the network out of a long-cycle planning and development system, dependent on a hierarchical model, manual scripting, and expensive and proprietary hardware to something completely different.
It’s a software-centric network architecture. It puts the user, not the vendor, at the center of the ecosystem on which it is based. It has decomposable elements with open interfaces that can be combined to rapidly create new services. Security is built into the network itself from the ground up; the only pervasive option to identify and address anomalous behaviors. It’s automated and programmable, and it includes powerful analytics monitoring tools that give you the actionable intelligence needed to identify issues and maximize performance across the network.
Ask yourself: what do I need to change in my infrastructure so it is automated, programmable, secure, self-monitoring and adaptive, without lock-in to vendors?
So get started. NOW! It will take time. Google chronicled its journey in a series of published documents that detail the replacement of traditional switches and routers with an IP fabric, as well as the move to software-defined networking, while it virtualized and automated nearly every network and business process. Now, Google is a massive organization with many different services, so their changes may be more far-reaching than yours, but don’t discount the value in your own business of moving to a more nimble, secure, software-driven network. And your vendors can help you on this journey, just as you help yourself.
We are in the midst of the biggest digital transition in history. It is reshaping every industry, giving rise to new corporate winners while household brands, whose leadership we took for granted for decades, fade from relevance. New, exciting technologies are redefining how we live, work and connect to one another. And for those of us who make our living in the networking industry, this transition is also providing significant opportunity to distinguish our skillset and further our careers.
In the midst of all of this, what we know is that networks have power. Networks are more relevant and more important than ever before. They will make or break business success, they will fuel or impede business growth. While some companies will struggle to survive the transition to digital business models, those that harness and exploit network effects will put fundamental network laws to work for their business. People who understand the power of the network to transform business models and create exponential value through co-creation are the new power players in every company and every industry. Business growth relates to business infrastructure. Networks are a growth engine and a platform for business innovation, upon which you can deliver amazing new services and create enormous new value.
Such tremendous change can be daunting, and it’s easy to give in to the temptation to bury ourselves in day-to-day tasks and ignore the wave gathering on the horizon. But be assured that change finds us all in some way, ready or not. So if you remember one thing from this series, let it be this: In such a dynamic environment, the biggest risk to you and your company is doing nothing.
I believe, as an industry, we’ve got this. The innovation we’re seeing today in networking is incredibly exciting and will move network capabilities to new heights. As a network professional, you’ve got this too. You know that change is part of technology. You love technology because you love to learn and you love change. (At least most days.) So go get the skills and experience you will need for the next generation of networks. Mark a recurring appointment in your calendar to check out positions for which you may be interested in applying one day. Look at what skills and experiences you will need to apply for those positions and go get them. Don’t wait for a forced organizational change. Get ready now.
And know that networks will continue to be at the heart of successful businesses. I believe in the power of networks. I believe in the amazing resourcefulness and creativity of all my colleagues who run networks. I believe in us collectively, and in the amazing industry we have created together over the past three decades. I believe in the enormous value and global good it has created. I believe in you.
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