The Next Trillion Dollars

The Next Trillion Dollars

What in the world would cause business leaders to allocate another trillion dollars to enterprise IT in the next decade? Quite simply, the prospect of gaining ten trillion dollars by so doing.

This is the fundamental equation of enterprise IT spending. If you want customers to give you a dollar, you must give them ten dollars in return, be that from new market opportunities to exploit or productivity gains from existing operations. Both these types of gain are best understood in terms of detecting and then releasing trapped value.

Let me give some examples. In the 1980s there was enormous trapped value in manually intensive office paper work; office automation, especially word processing, spreadsheets, and email, became the mechanism by which that value was released. In the 1990s there was enormous trapped value in redundant functionality replicated inside every corporation, especially in relation to manufacturing and customer service transactions; enabling outsourcing to release that trapped value became the fuel the drove the client-server ERP revolution. In the 2000s there was enormous trapped value in media and entertainment being confined to a handful of publishers and physical distribution to tethered endpoints; this drove the deployment of wireless broadband networks, mobile devices, and electronic distribution.

These were all decade long trends that have now settled into our core infrastructure, at least in developed economies. But the quest for releasing trapped value never ceases—the location just migrates. Today we are in the midst of one great new trend, based on enterprises of all kinds deploying Systems of Engagement (SOEs), and on the cusp of an even greater one, based on machine learning fed by data from the Internet of Things to power Systems of Intelligence (SOIs).

The amount of trapped value available for SOEs to release is readily grasped once you realize that a ubiquitously available, always accessible smart phone is standard equipment for every consumer, citizen, student, patient, employee, manager, service worker, parent and child. These phones put the power of an IBM 370/158 mainframe in everyone’s pocket or purse. Given that capability, given the amount of errors, the persistent misunderstanding, the wasted training, and the interminable customer support sessions that accompany deploying core-to-edge interactions, wouldn’t one want to reengineer every single one of them? The answer to that question is yes. The amount of trapped value to be saved is in the trillions of dollars, and thus there is enormous opportunity for any company who can facilitate this outcome.

As big as the impact of SOEs will be, once they are deployed, once they start feeding their logs into Big Data stores where they can be crunched by data scientists and machine learning, they will reveal a whole new universe of trapped value to exploit. Today we simply don’t know what we don’t know—but that is not going to last for much longer. With the advent of SOIs, we will come to know what we don’t know, and once we do, we will detect the trapped value in our current methods, and we will direct the next generation of investment to release it. Today early adopters like Amazon and Google have demonstrated the staggering competitive advantages that can be secured by these means. That in turn has sent wake-up calls rippling through the established enterprises that compete with them, and this will accelerate the adoption of SOIs over the next decade.

So we have trillions of dollars in view. Now all we have to do is go get them.

That’s what I think. What do you think?

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Geoffrey MooreZone to Win Book | Geoffrey Moore Twitter | Geoffrey Moore YouTube

Dan Zentgraf

Product Manager at Liquibase, Sales Engineering Management, DevOps, Platform Engineering Leadership

6y

This is spot-on, but I think you have actually underestimated the processing power / data acquisition capabilities of the edge devices today. They are even more under-utilized than the article discusses. Further, both dimensions of capabilities for edge devices are only going to increase for years to come. That potential also goes well beyond just SOIs when you consider the machine-to-machine interaction level, so the resulting opportunities to uncork value are, if anything, bigger.

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Isn't there a limit to 10X growth in IT ROI??

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James Staten

So sad that I am on disability now with Aphasia. Loved being a technology consultant for so long.

6y

And customers should realize that the only way to protect the value of their SOI will be to lock it down (in a cloud neutral data hub) and privatize access to it, to avoid hackers and thieves (by leveraging Interconnections).

Andrew Chrostowski

Board Member; Speaker; NACD Directorship Certified & DDN QTE

6y

Geoffrey (Geoffrey Moore), What great note to energize us to embrace the world of opportunity in front of us! The promise of SOEs are a clarion call for action. Time to roll up our collective sleeves.

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Giles Crouch

Head of Marketing Innovation | Digital Anthropologist | I'm in WIRED, Forbes, National Geographic etc.

6y

Brilliant! It's not just the IoT filled with trapped value, it's the content people are generating. This is a massive mind shift for businesses. Those that can make it, will reap the rewards.

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