Changing Businesses

April 25th, 2012 by

Five years ago, Netflix was a household name for offering mail-order DVD rentals.  Seven years ago, Valve was an independent computer game software developer. And ten years ago, Amazon.com was an online storefront for books. Today, Netflix streams video and makes video content, Valve is the biggest downloadable PC games distributor, and as for Amazon?   Amazon’s business plan when they started was to be the earliest to develop and leverage network connectivity and computing power in order to sell books.  Now what they’re selling is network connectivity and computing power.

Amazon’s influence is so massive that it now carries 1% of all the internet traffic in North America, according to Craig Lavovitz at DeepField.

The key factor in all these fields is the idea that businesses need to be extremely flexible. What you think your business is may not, indeed, be your business next year if you are savvy enough to recognize where your strengths are and take advantage of them.

Which makes the revelation of a Gartner survey that CIOs are being dismissed by CEO’s as “too techie” mindboggling.  More specifically, Gartner found that companies are preferring to hire CIOs from outside, rather than building CIOs through their own business, and that the basic hierarchy of the CIO position hasn’t changed in the past ten years, despite the massive changes in information technology that have occurred not just in the tech industry but every industry.  In fact, the role of the Chief Financial Officer will increase, according to a Google survey, while the role of the CIO decreases.

Part of the shift of emphasis from CIO to CFO is the shift in cloud computing.  The role of the CIO has often been, to oversimplify it, to answer the question: “How do we support our business applications?”  The answer, over the past few years, has often been: “We’ll pay someone else to do it for us.”

And this isn’t wrong, per se.  Information technology is about increasing productivity, cutting costs, and providing new opportunities for profit – all of which are the prime motivators for cloud computing.  But still, when companies focus only on their core competency, they may gain resolution, but they may also lose opportunity.  Striking a balance is a difficult, yet necessary task.

 

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