Technology is changing at a breakneck speed, it's evolving and advancing so quickly that there are some crazy things on the horizon in terms of how technology is going to impact the world. What are these crazy things that are going to happen in the future? That's what I want to talk about here today.
What we want to do today is not just talk about next year, in fact, we are not even going to talk about the next few years, we are going to talk a decade out or decades out from now, in terms of how technology today is going to affect the world and how it's going to affect the technology industry in the future.
We admit these are some far-fetched ideas, they may or may not happen but if you get creative and stick with it, we think you'll find that there might be some nuggets of truth in what we are saying here today.
The first crazy prediction that we have for the 2030s and beyond is that artificial intelligence is not only going to become mainstream but it's going to become so mainstream that it's likely to create a level playing field and equality across organizations throughout the world.
The reason for this is, if you cast your mind forward and think about AI advancing, becoming more used by organizations throughout the world, organizations will figure out how to clean data and input it into their artificial intelligence models.
On top of that, they will figure out how to access other sources of data, through internet of things, through third-party data sources, internal enterprise systems Etc. You have organizations that have artificial intelligence models that will essentially equalize, so you'll have organizations that are relying on the same data, the same artificial intelligence models and it's going to be harder for them to create any sort of meaningful competitive advantage. In other words, artificial intelligence is likely to create a situation where there's a commoditization of organizations, there's also the potential that it creates a commoditization of inequality or a level playing field within those organizations.
The big question I have as it relates to this prediction, is what happens to innovation if organizations are all leveraging the same AI models? They've got access to all this clean data, what happens to computation and innovation? Do organizations simply lose that incentive and that motive to want to innovate knowing that other organizations are going to be able to catch up using their own AI models and be able to predict the future and understand and anticipate what the future may hold? Artificial intelligence has the potential to create the opportunity and the risk that organizations throughout the world become somewhat commoditized and have a level playing field.
The Advent of technology has in many ways created a sense of paranoia with us as humans. We have geo tracking on our phones and our wearable devices, we have wearable devices that are tracking our heartbeat, health, movements and our activity, so, it's understandable that humans are becoming a bit skeptical or fearful of what technology can do if we keep heading in that direction.
One of the things that could happen in the future is that instead of having wearables and having separate devices that are tracking our movements and our health, it's not that far-fetched to think that there could be chips that are inserted into human bodies to do a lot of the work that's being done now by external devices. This isn't anything new, Elon Musk is working on his Neural Link tech and other futurists have talked about the potential for human chips as well.
Some people may think it's a good thing, some people may think it's a big risk and are fearful of this technology but wherever you stand on the spectrum, it's reasonable to conclude that this evolution of technology and the intrusion into our personal lives is going to continue for better or for worse. For that reason the idea of human chips doesn't seem that far-fetched, or does it?
When we think of Enterprise technology, we think of a curve, an acceleration curve and what's happening now in the 2020s is that enterprise tech is changing rapidly, as it always has but it's actually accelerated its pace of change.
If you look at the pace of change over the course of two or three years now, versus two or three years 10 or 20 years ago, the pace of change I would argue is a lot faster now in those two to three year windows and for that reason we think that it's reasonable to think that there's going to be an opportunity for upstarts and smaller software companies to chip away and undermine the market share of some of the big Enterprise technology providers.Some of the big ERP vendors like Microsoft, SAP and Oracle for example may lose ground.
In addition to these startups chipping away at the market share of these big tech providers, its reasonable to think that the big tech providers themselves are going to have trouble keeping up with the change. They're just too big, they're not nimble enough and they don't move fast enough for them to make a change to their big, massive, bloated, enterprise-wide technologies. In years past, you would see software vendors like Netsuite, Salesforce or Workday, that really came in as an upstart and really disrupted the industry. This was 20 years ago, so, now you look at the opportunity to disrupt the industry and one would argue the window is opening for smaller upstarts.
For that reason its reasonable to think those smaller upstarts are going to create more innovation, more disruption and become more of a threat to the big ERP vendors and the big tech providers. In 20 years, you may find that these big three tech providers SAP, Microsoft and Oracle are Irrelevant.
What perhaps the craziest and the most controversial prediction we will make for the future is that there's going to be a big backlash against cloud and SaaS enterprise technologies. Not because the technology isn't viable, not because the world isn't moving towards cloud and software as a service right now but because organizations have yet to feel the pain of what happens when they need to move off of those cloud or SaaS systems.
In years past, they could implement an enterprise-wide, on-premise system and replace it if need be. Not to say it wasn't a big deal, they're always painful anytime you make a system switch but you at least own the software, you had the software on premise, you had the data on premise and all of your integration was on premise. Making that migration was relatively straightforward, still painful but somewhat straightforward.
We have yet to see the first big wave of cloud customers that decide they are going to move off of the cloud system. Software vendors have done a really good job of locking in their customers and making those switching costs extremely high and extremely painful.
The other factor here is that cloud systems and especially software as a service, multi-tenant cloud systems are a lot less flexible than on-premise systems, they simply can't be as flexible as on-premise systems over time because in order to scale and support thousands, tens of thousands, hundreds of thousands of organizations using that product the way it was built, they have to be somewhat standardized or at least more standardized than the on-premise model.
This is not necessarily a good or bad thing on the surface, until you realize organizations change, they evolve, they need to move quickly, they need the technology to keep up with their business needs and the technology is going to continue to change and evolve but not necessarily the way that the organizations that are using that technology are changing and evolving.
Lastly, the third thing that's going to create some pressure in the long term for cloud customers is the fact that the total cost of ownership is going to be high. It's simply more expensive in the long term to use cloud solutions, those high subscription costs are costs that never go away, much like leasing a car and you can argue all you want, that well, we've saved money on our internal servers, we save money on maintaining that software but you haven't really netted a cost savings, you just shifted the money you were spending internally over to a software vendor, they've added their markup and now you're paying more than you were in the long term.
This too is going to create pressure in the form of a backlash against cloud technologies. In the next several years, organizations are going to start to feel the pain of that high switching cost and that relative lack of flexibility and there's going to be a backlash. I don't know if it necessarily means that organizations are going to move back to on-premise systems, it could be that the pendulum ends up swinging back and falling somewhere in the middle but all I can say is I feel like right now there's too much of a push towards cloud and software as a service and we have yet to pay the price for the dark side and the downside risks of cloud solutions. When that day comes, there's going to be some sort of backlash against cloud and SaaS systems as we know it today.
Technology is becoming an increasingly important part of our lives, on a personal level, on a professional business level as well and when that happens there's a lot of power and influence that comes along with that. When that happens, typically the governments throughout the
world are going to want to step in and regulate, they're going to want to make sure that people are not taken advantage of by technology providers, they're going to want to make sure that
National Security concerns are addressed and data protection is going to be addressed. In fact, you're starting to see some of these trends already emerge when you think about GDRP, which is a data privacy law in Europe and other privacy laws that are emerging as a result of big data and compiling massive amounts of consumer data with tech providers.
Its reasonable to think over time that trend is going to continue to the point where government is going to be an active part of the technology landscape and there's going to be more government intervention and regulation of that technology. This isn't meant to be a political statement, we are not suggesting that this is a good or bad thing but it seems to be somewhat inevitable that an industry is big and as influential and an industry that has so much to gain or lose in the modern day world, it only makes sense that the government would eventually want to regulate that or at least multiple governments throughout the world would want to regulate it. So keep an eye out for government regulations to be something that we see maybe in the 2030s increasing beyond.
If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Please contact me for more information eric.kimberling@thirdstage-consulting.com
