The Natural Life Cycle of a Technology?-Driven Company Is Under 10 Years

The pervasive role of technology now exposes every company, not just technology companies, to increasingly rapid technology-driven life cycles, which are typically less than 10 years, according to Gartner, Inc.

“Long-term expansion cycles influence all businesses, and your major competitor in 10 years - if you survive that long - probably does not exist today,” said Steve Prentice, vice president and Gartner Fellow.

Mr Prentice examined the future life cycle of technology companies during Gartner Symposium/ITxpo, which is taking place in Barcelona through Thursday. He cited examples of IBM Personal Systems Group, Nokia, MySpace, Kodak, Borders, HMV and other companies which have struggled or even failed to remain relevant. He said history indicates that the leaders in one wave rarely survive to dominate the next.

“To compete in this environment business leaders must destroy and rebuild the very businesses they helped create,” said Mr Prentice. “Nokia’s metamorphosis is an example of embracing the concept of destruction and reinvention, while the current business model still remains successful. The divestiture of IBM Personal Systems Group to Lenovo and subsequent changes of company’s focus is another example. Apple is another company which almost came to extinction several times over its life, and then dominated the next technology wave through significant changes to its operations.”

To survive and even prosper beyond the first decade requires continual reinvention. However, the challenge with reinvention is timing.

“The idea to ‘quit while at the top’ or to regenerate, may seem counterintuitive, but may be the only winning strategy,” said Mr Prentice. “It requires total commitment from the board of directors and other stakeholders, ongoing support from the workforce, but above all, the conviction in the correctness of the course of action being taken. The most challenging aspect is the need to destroy or walk away from what appears to be successful, but will rapidly turn into a crippling legacy which prevents regeneration.”

Business and IT leaders need to prepare for the disruptive promise of “smart machines”, which include autonomous vehicles, intelligent personal assistants (demonstrated by IBM’s Watson), smart advisors and advanced global industrial control systems. “Over the coming years, we expect to see dramatic growth in the availability, sale and use of smart machines. We predict that smart machines will be the most disruptive change ever brought about by IT,” said Mr Prentice.

The potential of smart machines and their impact is vast. They can make people more effective, empowering them to do what appears to be impossible. Just a few years ago the idea of ‘self-driving cars’ seemed very futuristic; today it is a reality and elements of those capabilities are already well established through automated features like collision avoidance, pedestrian detection and automatic braking. Fully autonomous trucks are already in commercial use on private property in limited numbers today, but their deployment will inevitably spread.

“Today, smart machines are usually the result of brute force automation,” said Mr Prentice. But the next generation will exploit a variety of techniques to not only learn, but adapt to their environment. They will be able to seek new information to deal with novel situations. The criteria for ‘smart’ will be continually rising in the coming years. “If anything, smart machines will strengthen the forces of consumerisation after the first surge of enterprise buying commences,” concluded Mr Prentice.