Information technology is revolutionizing products. Once composed solely of mechanical and electrical parts, products have become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in myriad ways. These “smart, connected products”—made possible by vast improvements in processing power and device miniaturization and by the network benefits of ubiquitous wireless connectivity—have unleashed a new era of competition.
Smart, connected products offer exponentially expanding opportunities for new functionality, far greater reliability, much higher product utilization, and capabilities that cut across and transcend traditional product boundaries. The changing nature of products is also disrupting value chains, forcing companies to rethink and retool nearly everything they do internally.
These new types of products alter industry structure and the nature of competition, exposing companies to new competitive opportunities and threats. They are reshaping industry boundaries and creating entirely new industries. In many companies, smart, connected products will force the fundamental question, “What business am I in?”
Multiple businesses, of course.
As my friend, Professor Chris Arnold, suggested with that link, you’ll see systems of systems built on interdependent and emergent behaviors. And, I think, re-dedicated and repurposed systems and behaviors as well.
You see this all the time. You’re not enjoying a day on the lake in a ski boat. That’s a 14-person party platform. And now you can custom-select the dash.
It won’t be much longer, then, before that boat can select your provisions based on your previous activities, or the new dash in its replacement craft. When your pleasure boat has you figured out … well, that’s going to be a pretty good Monday. Especially if the boat can also call in sick for you. Why would you go to work if you had a vessel like that? Because you work in multiple businesses.