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In Technology, It's About 10 Years, Not 100 Years

There's another problem with the 100 year concept - it's not realistic anymore

Silicon Valley is a strange anomaly in a big world. It's arguably the center of the technology universe, constantly cranking out new ideas, new products and new companies. And its residents create billions (or trillions) of dollars of revenue on the back on that technology. But Silicon Valley also has this self-belief that it's a romantic place, a modern day Camelot where the ills and evils of the world can be vanquished by spreading around magic silicon dust in just the right amounts. It looks to highlight the next 100 year company, which will cement it's place as a foundational pillar in the fabric of future global economies.

But there's a small problem with that romantic idea. That's not how the Silicon Valley DNA is wired. Regardless of whether or not people believe Silicon Valley is currently living in a bubble, its fabric is built on the creative desires of "what's next?" and not on "let's sustain this!".  In Silicon Valley, terms like "Serial Entrepreneur" are held in similar regard as "Doctor" or "Professor".  Nobody in Silicon Valley wants to be known as a 15yr veteran of Company X, that's not cool. They want to tell stories of their stealth start-ups and their IPOs, and how even though kids may have slowed them down a little, they are still active Angel investors and just had coffee with some Stanford kids that could be the next Google.

There's another problem with the 100 year concept - it's not realistic anymore, for almost any company, and especially in technology. The old standards of GE, General Motors, US Steel, P&G were created as a time when the opportunities were there to find, build and create "new", because major elements of society were either non-existant or lacking. Transportation infrastructure, population booms, population shifts, high-speed communications, etc. Now the next-generation of start-ups are looking to "fix the old way". Fixing things is fine, but by leveraging technology to fix it, it almost always removes segments of the value-chain that were critical to allow those 100yr companies to survive as long as they did. When you remove the barriers to entry, it's easier to deliver value to the market quicker, but it's also much easier to get disrupted by the next start-up that thinks your concepts "need to be fixed".  Your business may be one $0.99 app away from being inconsequential.

No, I think we'll find that the new standard to measure companies will not be 100yrs, but rather in 10yr increments. 10yrs is (roughly) the amount of time it now takes a new technology trend to begin, gain traction, endure criticism, rapidly grow and then hit an inflection point of either technology or business model disruption. The technology trends can be managed through shifting of R&D budgets or acquisitions, but managing through a business model shift is the real test of being a 10yr or 20yr company. 10yr alumni like Google, Facebook and VMware are trying to figure it out now, and their 30-40yr competition (Oracle, Cisco, Microsoft, EMC) are trying to figure out if they will be around as leaders or followers for the next 10yrs.

  • Proprietary vs. Open-Source.
  • Packaged vs. *as-a-Service.
  • Freemium vs. Ad-Supported.
  • Application vs. Platform.
  • Producer, Competitor or Coopetition.

We discussed some of this on a recent The Cloudcast (.net) with analyst Ben Kepes, as it related to Cloud Computing companies.

So why is any of this relevant? On one hand, as someone responsible for technology strategy (in IT, as a vendor, as an investor), it lets you plot trends against a 10yr timeline.

  • How old is a current trend? Has the next trend begun to emerge?
  • How old is the current segment leader vs. a new start-up?
  • How long has the business model of the current trend existed? Does it have a disruptive model yet?
  • How close are you to having to seriously face a business model change? Can a new technology trend help catalyze that change?
  • What does participation or lack of participation in this trend mean for your business? Is it required, nice-to-have or a or distraction?

On the other hand, even if the elaborate value-chains that created the 100yr companies of the past probably can't be repeated, it highlights that having breadth of platform does provide you with a much better opportunity for success in the current (or next) 10yr cycle. Changing technology is the easy part. Having to also change people/perception and process makes a much larger impact on either consumer or business decisions.

Subscribe the romantic novels of Silicon Valley if you wish, they make for fine tales of napkins-to-NetJets stories. But more importantly, align your strategic technology clocks to those 10yr time cycles. They'll not only tell you the pulse of tech-du-jour, but will help you decide where to place those next bets to "fix the old ways" with magic silicon dust.

Read the original blog entry...

More Stories By Brian Gracely

A 20 year technology veteran, Brian Gracely is VP of product management at Virtustream. He holds a CCIE #3077 and an MBA from Wake Forest University.

Throughout his career Brian has led Cisco, NetApp, EMC and Virtustream into emerging markets and through technology transitions. An active participant in the virtualization and cloud computing communities, his industry viewpoints and writing can also be found on Twitter @bgracely, on his blog Clouds of Change and his podcast The Cloudcast (.net). He is a VMware vExpert and was named a "Top 100" Cloud Computing blogger by Cloud Computing Journal.

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