The Fundamental Shifts Shaping our Future

Each month, I meet probably 10-20 customers from all over the globe. Sometimes I’m there to talk about projects we’re working on together; but most of the time I’m there to listen. We hear directly from R&D leaders worldwide about some fundamental shifts in the networking, telecom, semiconductor, software, and internet sectors.

As the business environment around them changes, customers are telling us that the production treadmill is moving very, very quickly, and they need new products every 18 months. They want a more agile environment where they can start building things and solve problems together in months — not years.

Customers also tell us they’re being made to change their businesses very rapidly, as they deal with this period of tremendous change. Many still have legacy products that need to be supported but they have to get into new areas quickly — hire new talent and find new revenue models. Essentially, they’re trying to respond to an ever-changing environment so they need ‘bursting’ support, which is often why they bring us in.

But with everything we hear from our customers, what can we learn? Well, there are three fundamentals here; three simple ideas that we can take away from customers and the trends we’re witnessing in the market.

  1. The Only Constant is Change
  2. Software is the Heart and Soul
  3. Innovate to Create Value

Change, Change, Change

Like taxes and death, the only constant we can count on is change.  As Cisco CEO, John Chambers, once said:

“If you look at the top companies in the industry, most of them will not exist in a meaningful way in 10 years.”Opens in a new window

User expectations have changed… and continue to evolve. Development cycles have collapsed. There is massive industry consolidation. Time to market for products has decreased dramatically over the last fiveyears.  Organizational structures have changed.  Competitors are discovering new ways to quickly adjust to the changing environment (think Cloud, virtualization, and SDN).  R&D teams are expected to provide more features and functionalities faster than ever before.

Change means speed.

Companies have no choice but to be more agile and flexible to accelerate time to market and deal with the events of the day. People have to move fast, but they have to move in the right direction.

It’s a Software World

Hardware is dead, and we have a crumbling PC ecosystem.  For the first time in history, this year has witnessed tablets outselling PCs. Software was a $407 billion-worth industry in 2013 and it has become the innovation engine across industries. Software fuels 42% of all venture capital funding. As Marc Andreessen said last year:  “Software Is Eating the World”Opens in a new window, — and he’s right.

The takeaway here is that if it’s all about software, then you need to have the relevant and current skill set to deal with the software.  There’s no denying that it’s changing the product engineering function as we know it today.

Innovate or Die

Innovation is the lifeblood of winning businesses in today’s economy and is the only way to create value.  And to create value, you need solutions.  Solutions solve puzzles.  It’s about thinking differently about the challenges and it’s often about business models.

I believe there are a lot of different ways to innovate, to be creative and to find ways to do things that can be differentiated, add value and create something that hasn’t been done before.

Some companies have already worked this out and we’re seeing it through a global R&D expansion.  Companies are investing $1.62 trillion in R&D globally, including $568 billion by Global 500 companies.
Quite simply, companies must innovate or die.
Whichever way you look at it, we are on the precipice of unparalleled changes to our businesses and the world around us.  Yes, these three major fundamentals are simple, but, I think, relevant.  If you believe that your business does not need to respond to the changes happening around you, let me leave you with a quote from Sunil at Bharti Enterprises.

“What is an entrepreneur who will not take risks? Speed has been our biggest weapon.”

 

Leave a Reply

Your email address will not be published. Required fields are marked *