Last week, we talked with Geoffrey Moore about digital transformation. In part two of our discussion, Moore talks about how marketing in the tech industry has transformed from business-to-business (B2B), to business-to-consumer (B2C), to business-to-business-to-consumer (B2B2C).
Skuid: How has the tech industry changed in the 40 years you’ve been in the business?
When I entered the tech industry in the late ’70s, and through the ’80s and ’90s, tech was basically a B2B business. The consumer thing came in very late in the game. That dramatically changed with the rise of the World Wide Web at first, then with search engines second, and then with mobile phones third.
Now, in this century, the consumer is really the driving force of innovation in tech, and enterprises are still trying to catch up to the consumer. In fact, I would say that B2C was the theme of the first decade of this century.
This decade's theme has been enterprises trying to leverage all this incredible digital capability the consumer created. But it has never been integrated, and was never intended to be integrated into an enterprise IT system.
However, it became very obvious, fairly quickly, that it should be. We didn't plan for this, but this is incredibly valuable. We need to find a way to leverage it.
That's been a huge change, and now you’re seeing that B2C is actually tapering down a bit, and B2B2C is the new thing, in other words, tech companies selling digital capabilities to enterprises that let them deal with their consumers, or their healthcare patients, or their students, or their citizens.
All these enterprises have constituencies that they want to engage with digitally, and so they want to leverage all these digital capabilities. That's been a big change. Therefore, the user experience, which was never an emphasis in the 20th century, has become an incredibly big emphasis in the 21st century.
You hear a lot about design thinking. Now, you’ve got machine learning and artificial intelligence, and the Internet of Things, and autonomous vehicles. Computers are doing things that, in our wildest dreams, we never imagined they would do.
Nobody ever, in my generation, ever thought a computer would drive a car. That's just like, "Whoa, where did that come from?"
That was a great answer, thank you. You gave a talk in 2013 at the Bridges Conference in Florida about the future of enterprise IT. You talked about this shift from systems of record to systems of engagement. I'd like to touch on that for a minute.
Sure. It follows the conversation we just had, which is that the 20th century was about building out large systems of record to run transactions, business transactions and social transactions. We built out the financial systems, and then we built out the order entry systems, and the inventory management systems.
They were all on mainframes and minicomputers. Then, somebody figured out client-server architecture, and we started putting it all together in a big thing we called enterprise resource planning (ERP) systems. ERP systems were the enterprise resource planning from end-to-end, from demand to fulfillment across the entire lifecycle, and it was great news.
This was SAP, Oracle, IBM, HP, and Accenture, and all these companies building out these global systems of record. They were amazing. Really extraordinary impact on the world. Having said that, we ran into Y2K, and we spent a whole bunch more on systems of record.
Then Y2K hit, and afterwards, everybody bought one more batch full of systems of record because they were afraid their systems were going to go down. Then it was like, "Oh my God, we've eaten too much." At that point, we had sort of a global burp.
We call it the Tech Meltdown, but the truth is we just did overeat. At that point, the consumer stuff came in. The consumer stuff was largely media, and that became e-commerce.
People realized these systems were really engaging people's attention.This is where the enterprise wanted to say, "Look, all these people have these mobile phones.
All these people have this free stuff. We need to figure out a way to leverage these capabilities, and take advantage of them. That was what we called systems of engagement, where you say, “I want to interface my transactional systems and my communication systems via the mobile web, via the mobile device, via wireless, via apps.”
We tried to do the web on the phone, and that didn't work. So we created apps, but they had to connect back into our systems of record, because otherwise, what's the point? That was a big deal, and nobody had a budget for systems of engagement.
All of their budget was spent on maintaining systems of record. That was a challenge for people, that we had to create a conversation people could go back to.
All my life, in a sense, I've been trying to help IT people create conversations with their internal customers to allow them to say, "Look, this is why we need this stuff," because their customers don't understand. They don't want to spend money on stuff they don't understand, so they don't, and they get behind. That's where the opportunity to make a contribution came from.
Can you talk about the rise of collaborative business networks, and the need for better communication within the enterprise?
That's an interesting thing, because as I'm fond of saying, when I went to school, collaboration was called cheating and you were expelled for it. Needless to say, my generation is not leading the charge in collaboration.
In fact, this is one of the challenges that Microsoft has had to face, because Microsoft didn't make collaborative software. That was never its intention. Its intention was to create personal productivity software, which is fine, but that's not what the current generation of young workers want.
That's not how they work. When my children went to school, they learned to work in teams, and they learned to collaborate. The systems of engagement software was inherently social, and it was inherently collaborative.
That has been very supportive of a different work style, so if you think about all the Microsoft Office stuff, it was designed to collaborate around a document. A document might be a spreadsheet, it might be a presentation, it might be a Word text, but it was a document.
What the next generation of collaborative software said is, "No, we collaborate around a thread, around a feed." It's more like Facebook. It's not a document. Frankly, yes, eventually somebody will finish the document, but that's just a matter of cleaning up after we're done.
That's not the real meat. That was a big wake-up call, and it's a continuing wake-up call because large corporations, to this day, are not really set up to do that right.
I've never really thought about collaboration and working together being a generational thing. That's so interesting.
I found it interesting for me because I realized that I've always thought of myself as a good collaborator. It turns out, by contemporary standards, I'm a horrible collaborator.
I like to work by myself. I want to do it myself. It's not that I'm trying to get credit for myself, although probably, I have an ego that's as good a size as anybody's.
But more directly, the problem is that I just get things done faster if I don't have to collaborate. And I think that’s because I probably don't know how to collaborate, because I didn't learn it in school. That's not what I do.
Thank you so much. I really enjoyed chatting with you.