The Internet has completely changed the world of business.
The instant, two-way communication offered by the World Wide Web has altered the world of business immeasurably. As a result, the way that companies develop and market products, interact with consumers and conduct business is almost unrecognisable to what it was a couple of decades ago.
But is the future of all business digital?
Here we take a look at the impact the Internet has had on different businesses and explore what lies on the horizon.
‘Just for geeks’
In 1998, British entrepreneur and EasyJet founder Stelios Haji-Ioannou famously referred to the Internet as a place “just for geeks”.
The British entrepreneur believed the idea of people buying flights online was one that would never take off. By 2003, however, the vast majority – 90% – of EasyJet flights were booked online.
It turns out holidaymakers love the simplicity of online booking – and there are many more examples of products and services that were previously thought to be impossible to sell online that are now being bought on the Internet on an unprecedented scale.
Computers and all the accessories that come with them are among the most popular items sold on the Internet today.
It is a fact that would probably come as a shock to Ken Olsen, co-founder of Digital Equipment Corporation, who once said there was “no reason anyone would want a computer in their home” back in 1977.
It has gone down in history as one of the most spectacular technology prediction failures of all time, particularly as it came from the boss of a computer equipment company, as more than five billion devices around the world are now connected to the Internet.
Ken Olsen could be forgiven for having these opinions back in 1977. Who could have predicted how things have turned out?
But this does make you wonder whether modern CEOs and marketers are any better than Mr. Olsen at predicting future trends in technology that pose huge potential risks to their business.
Below are some examples of business sectors that are currently undergoing huge changes or can expect to be majorly disrupted at some point in the near future.
Large agricultural companies have started to talk about a revolution in farming which is set to transform the industry. Monsanto and DuPont are two companies that are attempting to introduce “prescriptive planting” technology in order to increase agricultural efficiency and profitability.
In essence, prescriptive planting is a system that uses data from the farmers themselves as well as Global Positioning System satellites and predictive models based on historic weather patterns, topography and crop performance to tells farmers which seeds to plant and how to cultivate them. And both of these companies are now making acquisitions in the technology sector.
Monsanto recently paid $930 million to acquire a company called Climate Corp., a company started by two former Google executives, that monitors weather patterns to provide insurance to farmers in the case of drought, floods or other adverse weather conditions.
The company’s platform studies measurements from 2.5 million geographical locations and forecasts from climate models, along with 150 billion soil observations to generate 10 trillion weather simulation data points used in the company’s weather insurance pricing and risk analysis systems.
DuPont recently announced a partnership with a weather-and-market analysis firm, DTN/The Progressive Farmer, to provide real-time climate and market data to DuPont’s customers.
But not everyone is embracing change. Many farmers are sceptical and reluctant to get involved, citing concerns over privacy and data ownership. But if these systems prove successful in increasing yields for farmers, then it’s only a matter of time before they are widely adopted.
The Internet has exceeded all expectations as a tool for communication and collaboration. Even industries that were previously thought to be too complex to go digital are now almost entirely operated online.
Trips to the bank used to be extremely common but are now a rarity in many developed countries as customers rely on their computers and mobile devices to conduct transactions online. Most banks are in the middle of a balancing act between offering a service through their high street branches and offering self-service banking online.
The way that customers view banks has also changed. In the past, many people had personal relationships with their bank managers. This has changed drastically.
A recent report by Accenture stated that mainstream North American banks could lose up to 35% of market share to new digital competitors.
Furthermore, many people have become increasingly interested in peer-to-peer lending. Firms like Zopa, Funding Circle and Ratesetter have all experienced huge levels of growth in recent years.
Zopa, the world’s oldest and Europe’s largest peer-to-peer lending service has lent over £600m since it was founded in 2005. Ratesetter has facilitated £328m since 2009 and Funding Circle has provided over £223 million in loans to small and medium sized firms in the last four years. Almost all of these transactions are conducted online.
Realtors are also facing an uncertain future as the digital revolution continues to disrupt the business of selling bricks and mortar.
The property market has changed a lot recently. Sites like Zillow and Trulia have made it much easier for would-be buyers and renters to find properties online from the comfort of their homes. The growing popularity of these online real estate websites has allowed homeowners to wrestle control from realtors.
It may only be a matter of time before the peer-to-peer model is applied to the property market and buyers and sellers connect directly, reducing costs and streamlining the complex process of buying, selling or renting property.
The healthcare industry might be the one that experiences the most drastic changes as a result of new technology. The industry is extremely mature but has historically been quite slow to innovate – taking much longer than many other verticals to adopt new technologies. But maybe this is set to change.
Many startups focusing on the health sector have launched in recent years and these young, tech-savvy companies are flourishing.
HealthTap is one example of such a business. The company was founded in 2010 by Stanford graduate Ron Gutman. It allows people to access health information, medical experts and provides action recommendations. The network includes thousands of doctors, which users can access for free using their website, social media or smartphone app.
There are numerous other examples where new entrants and incumbents have taken ideas that have been successfully implemented in other industries and adapted these to healthcare.
Another way that healthcare is changing is due to the availability of Big Data. Previously, the large pharmaceutical companies benefited from a monopoly on the ownership and control of information. However, the advent of Big Data allows other companies to collect information on drugs, clinical trials, patient behavior and a range of other factors – which they can use to develop new healthcare products and services.
What does the future hold?
Given the speed at which technology is advancing, the industries that have been disrupted by digital technology probably represent the tip of the iceberg.
It’s safe to say that no single business or industry can be complacent about the changes that are afoot. Business leaders need to embrace new technologies and digital transformation of their businesses in order to continue to operate effectively in an increasingly competitive environment.