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Is the Third Industrial Revolution coming?

01 January 2015

Enterprise Computing Trends_1

These days, at Oracle we speak of an upcoming "digital disruption".

These words haven't been picked accidentally: distruption, rather than transformation.

This is somehow reminding me of Jack Welch of General Electric when, on the Internet advent, he had launched his internal initiative

The term disruption indicates that something momentous is happening.

But… what is then happening, and why should this be so shocking?

Many things.  For example, we are all observing that we are literally invaded by an enormous amount of data.  If taken in isolation, they may appear meaningless, while as a whole they could instead turn into useful information and competitive advantage.

I am inviting you to visit, which measures the data that is instantly generated on the network by Social Networks or various messaging systems.  A very interesting experience, which makes us “touch” the magnitude of this phenomenon.

In addition to the Social, we must of course take into account the so-called Internet of Things, and the data generated by billions of mobile or other "smart" devices.

Faced with this phenomenon, the US analysts are talking about the SMAC - which stands for Social, Mobile, Analytics and Cloud -: these are the four technological waves that are transforming the world and that, among other things, are putting in the consumers’ hands, powers never seen before in history.

However, after a digital destruction, must obviously come a reconstruction, digital again.

And what does all this mean for us today?  It’s an urgent call to adapt as quickly as possible our Companies to what the experts call the "third industrial revolution".

Actually, these changes are permanent, and are investing all business areas: we'd better gear up to take advantage of them.

It is therefore essential that our Companies invest in these destructive technologies TODAY and learn how to govern them to compete globally TODAY and give appropriate responses to customers who will inevitably be increasingly prepared.

It is no longer possible to work with Information Systems based on applications 20+ years old, obsolete if not outdated, and unable to accommodate the innovative stimuli mentioned above.

The I.T. technologies are indeed ready to support the required changes: at Oracle, for example, we have a full set of Cloud Solutions.  Most importantly, we are leaders in providing Hybrid Cloud Solutions, i.e., a mixture of new Optimized Data Centers and Cloud Solutions, which, as an aside, are also turning the IT budgets’ CapEx into OpEx.

In Oracle we are supporters of an I.T. democratization phenomenon.  We do believe it is in fact possible to innovate while simplifying the complexity of IT, namely while reducing the costs of IT itself.

These new Solutions, such as those in the Cloud, enable to break down barriers, as well as small and medium Enterprises to access to those computing assets and applications portfolios that were previously only the privilege of very large Companies.

Today the IT companies like Oracle are taking on the necessary initial CapEx investments, otherwise nowadays prohibitive for many Enterprises.

Multiple Companies which have recently adopted Cloud Solutions are representing an invitation to all the others to mobilize and adapt to the challenges of this "Information Age", whose essential characteristics are the very large amounts of data and the high computing power capacity required to process them, and extract information useful to their Company.

Many may argue that the Public Sector should set the agenda and the right example.  However, we must admit that there are areas of excellence in the public sector, incentives for innovating, and that also the Digital Agenda is progressing, albeit slowly, at both the EU and at Country level.

Could we do better and more? Certainly yes!

A serious analysis would require much more than a hint, however, we should and could act on the classic three levers: processes, organization and people.

A) Processes. There are numerous examples abroad, such as the Ministry of Economy in the Netherlands and AGE in Spain.  In both cases, there are initiatives to share IT Data Center services for the whole Central Public Sector.  Also interesting are the UK initiatives called G-Cloud and for the healthcare system.  Last but not least, I’d like to mention the Best Value Procurement approach adopted by the Ministry of Economy in the Netherlands for the recent acquisition of a large project: they have empowered their Purchasing Department, enabling them not to focus on the grim logic of the classic tender lowest possible price, but instead on the overall quality of what they buy, without of course forgetting the costs components.

B) Organization. As an example, I understand that there are approx 4,000 Data Centers in the Public Sector in Italy. Clearly, they should be consolidated to both generate savings & simplify: WE do need to act systemically!

C) People or Training: the above new digital skills are associated with new emerging professions. As an example, I’d like to quote the Master in Big Data Analytics, which will begin from March 2015, organized by the Luiss Business School of Rome together with Oracle Italy with the objective to prepare the future Data Scientists.

As for the Digital Agenda, I consider it is necessary to call the best forces in the market to close the gap now evident and growing.  This could be done and accelerated only by leveraging the capabilities of the leading IT Companies, and by selecting the elements of their technology offerings to support the objectives of the Digital Agenda by pursuing broad collaborations in partnership mode.

Alongside these new approaches, we will necessarily have to overcome financial difficulties due to the reduced spending in the Public Sector, by creating new financing tools through a more active participation of the privates, which may be sharing risks and investments for the projects defined in the Digital Agenda.

However, the IT investments in the Private Sector - as much as in the Public Sector - are slowly declining, and most of them get diverted into maintenance, rather than in innovative initiatives.

The Private Sector should then share with the Public one the sense of urgency to accelerate the necessary and desired path of transformation, and adopt these new Information Technology solutions.

To summarize, there are serious reasons why the Italian and the European Companies should innovate, and in this period of history.

In his recent book, ”The Third Industrial Revolution”, Jeremy Rifkin argues that, as a Country, Italy could still turn this new industrial revolution into a great opportunity, as it was able to do in other times in history, thanks to its unsurpassed creativity and entrepreneurial skills.

This is of course valid for many other European Countries.

I believe we can make it and, at the same time, I wish this to all of us in 2015 & beyond!

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