David Moschella: Wrapping your Firm in an Ever-Thicker Digital Fabric

ATN-300InsightaaS: Regular ATN readers are well aware of the respect we have for David Moschella and his posts in CSC’s Leading Edge ForumMoschella has a well-deserved reputation for developing unique perspectives that drill through the surface of IT to find important longer-term trends, and this post provides an excellent example of this type of thought. In it, Moschella essentially says that businesses are pivoting from a vertically-defined approach to one shaped by horizontal IT capabilities. He believes that we are moving beyond Mark Andreessen’s famous observation that “software is eating the world” to a state where four horizontal “layers of digital fabric” form the core of corporate activity. The layers – compute/store/connect, identify/secure/transact, publish/communicate and sense/analyze/understand – are delivered as standard services shared across industries, making them on one hand much faster to deploy, and on the other more reusable across contexts, than has been the case in the past. The implication is that competitive advantage will shift from firms with deep domain expertise (e.g., how to build a vehicle) to firms that are able to effectively assemble existing capabilities; Moschella uses the example of a self-driving car as “really a digital fabric project leveraging GPS, digital maps, sensors, software, car-to-car communication and decision- making algorithms, all of which will also be used extensively by other industry sectors.” He closes by noting that while the impact of this shift won’t be known for years, “the competition between traditional vertical stacks and shared horizontal platforms is well underway.” This is a shift that InsightaaS has remarked upon in other contexts, too – for example, in Michael O’Neil’s new book “The Death of Core Competency” and in ATN items on the collaborative economy. Clearly, something is changing in the increasingly-digital economy – and Moschella’s post provides a fine model for categorizing and understanding the key trends driving this change.

Disruption has clearly been the dominant IT buzzword of 2014. But as impressive as Uber, Airbnb and others have been, they are really just a by-product of a longer-term shift that continues to gain momentum. An ever more capable digital infrastructure is absorbing much of what individual industries have historically done for themselves. As many of the boundaries between traditional sectors break down, important new sources of innovation, value and disruption are emerging.

Over the course of the 20th century, each industry developed its own vertical stack — research, design, development, production, marketing, sales, service, etc. Although there were essential forms of shared business infrastructure — electrical utilities, transportation systems and telephony services — most industry sectors were much more different than alike. Many executives and employees spent the bulk of their careers in a single industry because that is what they knew.

But today, significant chunks of the traditional vertical industry stack are being replaced by an ever more powerful digital fabric of horizontal services — the IT infrastructure equivalents of energy, transportation and telephony. When Marc Andreessen says that “software is eating the world”, this is what he means. However, as shown in the figure and discussed below, these shifts are not just about software. There are at least four main layers of digital fabric activity today…

Read the entire post on CSC’s Leading Edge Forum blogsite: Link



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