Fernando Machado Píriz's Blog

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Archive for the ‘Digital Transformation’ Category

Digital Transformation Foundation: “Software Defined Everything” and “Everybody Codes”

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There seems to be an agreement on digital transformation being less about technology and more about business design and a customer centric culture. Obviously it’s not about digital technology: DVDs, as its own name implies, are digital movie containers as opposed to analog videotapes or photochemical films, but wasn’t until Netflix added video on demand via the Internet to the DVDs physical delivery business, that they became a reference on digital transformation.

As George Westerman et al. put clearly in this book -or in this article summary-, it’s the transformational management intensity, i.e. how much top managers are betting on digital transformation, what separates digiratis -digital literates- from the crowds. Nevertheless, companies still need to think on the foundation for their digital transformation, and precisely there is where digital platforms come into place; of the other way around, a digital platform won’t make your company to digitally transform, but can’t transform without one.

What’s that platform? It’s whatever makes frictionless to combine incumbents and partners into your business and for you to participate in others businesses “to execute [your organization’s] digital business strategy”, accordingly to Gartner.

A while ago hardware machines were a physical thing; now we have hardware virtualization by software and then we have virtual machines. Also a while ago we had physical arrays of spinning hard disk drives, and now we have software defined storage; we had physically connected cables, routers, switches, firewalls, etc. and now we have software defined networks; and the list goes on up to big things like software defined datacenters or down to small things like software defined chips, or more precisely field-programmable gate arrays.

Even the IoT devices very common in many digitally transforming businesses can change their behaviors based on the software they run; the dumbest the device, the longer their battery life, less their capability of running sophisticated software or even to run software at all; but put for example a field gateway behind it, connect it to the cloud, and then you have your software defined IoT too.

These platforms have another interesting characteristic: in order to achieve the agility and easiness of adaptation, they embrace change and make changing easier. The [business] rules that control the behavior of the applications running on these platforms can be changed in a declarative way -as opposed to imperative or algorithmic-, eventually through a graphical use interface managed by some business user, not a programmer. It’s declarative, but it’s still giving orders to a computer to do thing, so it’s still programming or coding.

The end user who does acceptance testing doesn’t necessarily use the application itself anymore to see if it works as expected. They won’t do that fast enough and won’t do it as much times as it takes to deliver changes on a daily basis -or even more frequently-. Then the only way is to ask them to declaratively specify how to do the tests instead of doing the testing by themselves. Once again, it’s declarative, but it’s still coding.

So we have end users coding, either by adapting applications running on platforms to do new or different things or by make sure the applications work as they want, we have also more people coding: operators.

Operators now do write scripts to do repetitive tasks. It’s faster, and most importantly, it’s less error pone: once scripts works, they don’t forget steps or make mistakes as human operators sometimes do if they’re tired or in a hurry, stressed by a deadline.

And programmers have always coded; so now everybody codes.

So that’s for me what a platform implies for digital transformation: “software defined everything” and “everybody codes”. And again, this won’t make your organization to digitally transform, but it’s very unlikely that you can transform without one. I’m fortunate enough to have a computer science and software development background; it’s easier for me to understand and to explain to my customers this foundation for digital transformation.

Written by fernandomachadopiriz

December 30, 2016 at 5:14 pm

Learning Digital Business Transformation through example… from my kids

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Yesterday I had a deep conversation with my eldest son about League of Legends. I must admit I am not fully comfortable with him spending countless hours playing this online game. What I did not understood until yesterday was the profound undergoing digital transformation that the entertainment industry is experiencing as we speak.

If you think League of Legends is just an online game and its creator Riot Games are just a game publishing company, you are as wrong as I was. Let me try to explain what wonder me most by doing an analogy with football (i.e. soccer for those few reading in the U.S.)

More than hundred years ago, all around the world there were the football players playing football matches in the football field, and there were also the supporters in the stadium’s bleachers attending the matches. Local leagues of football teams organized local championships, regional federations organized regional cups and, then less than hundred years ago, the worldwide federation, also known as FIFA, organized the worldwide cup in my home town. Bribery and scandals aside, football is a multibillion dollars business, isn’t it?

About seven years ago, Riot Games developed and published League of Legends, a multiplayer online battle arena, real-time strategy video game, very popular among teenagers from 12 to 19 years old. There were teams of five online gamers teams playing games against other teams eventually in opposites sides of the world in real time. These gamers are actually gamethletes, a skill-based ranked community of people all around the world, who love to play this online game. There are local championships, regional championships, and there is the worldwide championship. The topmost ranked gametheletes are actually professional players who get paid for playing. Amazing, uh? Well, not really. The Messis, the Suarezes, and the Neymars of the football are paid, and very well I must say, for playing the sport they love to play, aren’t them?

Who pays the League of Legend’s gametheltes? Riot Games does for most of them and teams participating in the Worldwide Championship are even sponsored by brands like Samsung or SK Telecom. How Riot Games makes money to pay them? Well, you can get almost everything, and go almost everywhere in the game without a penny, but money can make things go faster. Just by playing games you earn points, and then you use those points for stuff like costumes for creatures in the game. But you can also buy points. And before you ask, yes, my credit card number is somewhere inside Riot Games’ datacenters; somewhere deep inside, hopefully.

But here’s where things become even more interesting. The 2014 League of Legends Worldwide Championship final was played at the Sangam Stadium, also known as the Seoul World Cup Stadium, built for the FIFA’s World Cup in Korea in 2002. About 40 thousand people attended the 2014 League of Legends finals live and companies paid for advertising spaces on the stadium, yet another 27 million watched them live online via streaming served by 40 broadcasters who also paid for the content. I don’t know how much they paid, but winning teams raised about 2.13 million dollars in prizes, so there should be good business case, shouldn’t?

The game’s user interface layout used for broadcasting is similar but different to the game layout used to play against other teams: it needs to show the full battlefield, not just the portion your team controls, and needs to show both teams’ actions. But it also allows space for advertising, so that’s how the broadcasters makes money.

My analogy with football isn’t about the sport, it’s about the entertainment industry. And there’s this multi-million dollars business of online multiplayer gaming, of which League of Legends is just one of them, mainly for teenagers who don’t have money, run by relatively few people, that enables a huge ecosystem for others to make money too, including those content generator teenagers who record their games and publish them online on YouTube or broadcast them on Twitch and get paid for it because other teenager consumers do watch them.

Putting it simply, that’s pretty similar to the business model behind the entertainment industry, isn’t it? And it’s fully digital. And it took just seven years to get there.

Written by fernandomachadopiriz

July 14, 2016 at 2:29 am