Last week I attended the Wall Street Journal Digital Live event in California, a premier global technology conference that brings together the best CEOs, company founders, and innovative minds to explore the most exciting opportunities for tech around the world. There were several riveting talks about the on-demand economy and the role that tech companies play—from Uber Co-founder and CEO Travis Kalanik talking about the future of transportation, to CBS President and CEO Leslie Moonves discussing how to remain competitive in the new age of television. (This reminds me that I need to catch up on “House of Cards” on Netflix …).
Even as far back as 2004, the International Trade Centre reported, “some analysts predict that by 2020, services will account for 50% of world trade.” This prediction was not far off.
Speaking of Netflix … not long ago, I remember having to order pre-bundled packages from cable companies that only included a few channels I really wanted to watch. These packages were often over-priced and, in order to get the channels I wanted, I had no choice but to pay for a bunch that I didn’t need.
My, how things have changed. What’s the biggest difference between then and now? Services! We live in an on-demand, subscription-based world, which has changed the way companies do business, and people live their lives.
Companies like Netflix paved the way for others such as Uber, Airbnb, and even lesser known companies like Cars2Go to join in on this economic shift; today, these leading companies, more often than not, sell services or access to products, more so than selling tangible goods, full-time. The cloud, ubiquitous broadband, smart devices, virtualization technologies, and SaaS business models have all played a role in building this market reality, driving unprecedented changes for businesses and consumers, alike.
So, how is the shift to the services economy changing the tech industry? Here are what I see as the top three changes on how we do business, and engage with customers – all for the better.
- More freedom and flexibility for IT
With IT infrastructure costs being covered by subscription models, engineers, developers, and other employees have more freedom to develop new ideas, and provide customers with improvements more frequently. No longer does an IT “upgrade” mean “rip-and-replace the infrastructure.” Rather, it involves a simple installation of software without the up-front capital expense.
- Mobile Workers and consumers are one in the same
Mobile workers and mobile consumers are no longer considered separate. Workers, and therefore consumers, can switch services as they desire, work where they like and focus on what truly matters to them—services that enable them to work and live with the greatest amounts of efficiency, and delight.
- Each new customer is a lifelong partner
Within the services economy, companies now have to think of each new customer as a lifelong partner. A company must provide value on a sustainable basis lest the company be abandoned for the next company who will. This also opens up opportunities for competitive advantages in the services economy. More on this from me in the coming weeks.
I’d love to hear your thoughts in the comments. What are some other ways the shift to the services economy is changing tech? How is it influencing the ways in which we conduct business and live our lives?