Digital Davos as tech CEOs oust the economists

Profile picture for user slauchlan By Stuart Lauchlan January 22, 2014
Summary:
"It’s usually the Nobel Laureates at the World Economic Forum doing the economic review. We took their spot this year." Salesforce.com's  Marc Benioff makes a valid point as he and his peers debate digital directions at Davos.

The logo of the World Economic Forum
It’s the World Economic Forum - so where are the economists?

It fell to Salesforce.com CEO Marc Benioff to ask the question at the opening session of this year’s Davos jamboree which was a debate entitled The New Digital Context. 

"It’s usually the Nobel Laureates at the World Economic Forum doing the economic review. We took their spot this year.

"The banking crisis is behind us. The economists are not on the stage. This is about new ideas. You might call this session the New Ideas Context."

Actually the session set out to answer the question: what societal, economic and technological forces are reshaping the digital landscape?

The New Digital Context: Overview
On the panel - moderated by Forrester Research CEO George Colony - were:
  • Randall Stephenson (RS), CEO AT&T
  • Marissa Mayer (MM), CEO Yahoo!
  • Marc Benioff (MB), CEO Salesforce.com
  • John Chambers (JC), CEO Cisco
  • Gavin Patterson (GP), CEO BT.

You can check out the full debate here - running time is an hour, so you might want to stick the kettle on first!

Some of the highlights include:

What technology has changed your life? (And it can’t be something you sell!)

JC: “I loved Blackberry but I switched over to the iPhone because of the Apps. I use it tremendously. It’s going to be a video world. Two thirds of the applications on the mobile phone will be video. We’ll talk virtually for the future. Personally it’s how I do business I do more meeting with my customers virtually than I do physically. It lets me do everything from watch what my grandson did yesterday to interpreting how good a sales forecast is. I think video is the primary way that you learn.”

MM: “It would definitely be the iPhone. The recent statistic is that the average person checks their smart phone 150 times a day. Mobile is certainly one of the trends that is setting the pace for our business.”

MB: “The most important piece of technology I’ve found in the past year is the Fitbit. It’s communicating constantly with my phone using Bluetooth 4. I lost 30 pounds wearing the Fitbit. I do 10,000 steps a day. But here’s the amazing thing - last week I got a call from Michael Dell. He asked if I’m feeling okay. ‘Why?’ I asked him. ‘I’m worried about you,’ he said, ‘because I’m your friend on the Fitbit network and noticed you hadn’t worked out in the last 3 days and wanted to make sure you’re okay.’ I had a cold like everyone in San Francisco and decided not to work out to get ready for Davos.

The New Digital Context: Marissa Mayer, Marc R. Benioff
No toothbrush this time

"What does it mean? Here I am a public company CEO and people know if I have a cold. People are maybe going to know my heart rate, what my blood pressure is, what my glucose level is. The personal enlightenment you get from this technology today is so awesome. I know more about myself than ever, but what does it mean when everyone knows everything? That call really changed my view. Behind everyone of these devices or everyone of our tweets, we forget there is a person. It’s going to fundamentally change our relationship with people and organisations?”

RS: “I was last here in 2009. I’m watching this compared to 2009 and people using iPads and iPhones that did not exist. Last night my grandson is sick and I have my iPad up and he kissed my wife’s iPad. Technology is personalising things as never before. Mobile and video is just a huge change in how we all behave and interact.”

What have you been most impressed with technology-wise behind the scenes?

GP: “The explosion of bandwidth and the capabilities that is going to bring to consumers. A few years ago, certainly within BT, we didn’t expect people to need more than 8mg. These days the appetite for customers to use a lot more bandwidth 24/7 is exploding. Every time you reach a cap on what you think people want to buy, it doesn’t last long. In our labs, we’ve been testing something called G.Fast which allows you go get over a gigabyte into a premise. It is possible now and there will be demand. The desire and the appetite and the ideas and how people use it is just beginning.”

RS: “In Austin we are putting in fibre for 1 gigabyte to the home. That’s on the fixed line side. Go to the mobility side and LTE deployment in the US is at a hyper pace. Bandwidth is exploding. Probably the biggest bandwidth deployment in the world is fibre to cell sites. There is just this multi-billion dollar investment around the world to deliver this bandwidth. The smart phone has become the remote control for virtually everyone’s life. It’s dictating and driving everything we do behaviourally in our work life and our home life. The connected car is coming at hyper speed. Europe is going to see a doubling in next 12-18 months. It’s double in the US already.”

JC: “The key trend is 10 billion devices connected to the internet Those devices are all video. Play this out and in the next five years you’ll see us developing routers that can download the entire Netflix library in one second. Bandwidth will not be a problem. It’s how we apply that. The biggest transition that’s happened in the world of IT is when you connect everything - and I mean anything - to the internet. It will change productivity of countries, it will change business models, it will change our everyday lives. It will be five to ten times more impact on society than the work we’ve done to date on the internet.”

Why can’t large companies be disruptive?

The New Digital Context: Gavin Patterson
BT's Gavin Patterson

JC: “If you look at big companies, only a third of us will exist in a meaningful way in two decades. My competitors from 15 years ago, none of them exist. From ten years ago only one exists. From 5 years ago, only a few. If you don’t disrupt you get left behind. You catch market transitions. You listen to customers. You tie these together to get architectural advantage that lets you move fast. But you have to build that into your DNA. You have to tell your teams that you want to take risk and by definition you’re occasionally going to fail, but you have to create that culture in order to do it.”

MM: “It’s either change or be changed. We have very sophisticated models that show what’s going to happen with our traffic this year. For Yahoo, 2014 is the year of cross over. By the end of this year we will have more mobile users and mobile traffic than we have PC traffic. We pride ourselves on running the world’s largest start-up. Can you be a large company and be flat and transparent and give lots of autonomy to let people think about how should we be changing? What are the new disruptive things we should be into?”

MB: “The premise is not as true as it used to be. Everything is going so much faster that companies have to change so much faster. I look at what General Electric is doing and it’s a broad, fundamental disruption of their business and their technology model. You can go industry by industry and I can give you examples of the biggest companies in each industry completely transforming themselves because the technology that we have been given over the past decade or so is so unbelievable that the ability to transform today is just so much easier. You can make this change, you can make this shift and you can do it right now.”

GP: “Any company that is not challenging the status quo will not survive. As a company we’ve managed to survive since 1869. You’ve to invest in R&D but you’ve got to be clear where your advantage lies. Outside of that you’ve got to be open to look to partner with companies and not look to do everything yourself.”

The NSA scandal - one request for President Obama from a tech CEO perspective.

MM: “Transparency - so that we can help our users understand the number and types of request we’re getting and how that data’s going to be used. We need to be able to rebuild trust with our users.”

JC: “We don’t get any government orders so we come at it from a different perspective. You need some rules of the road that everyone can live with, especially countries that are closely allied. It’s been the wild, wild west. We need everyone to come up with some general guidelines, starting with transparency.”

GP: “The legislation and the regulation has to catch up. This is a challenge for many different parts of our business models at the moment. It’s often several years behind. Certainly in this sphere it’s not fit for purpose today.”

The New Digital Context: Marissa Mayer
Marissa Mayer

MB: “This was a very healthy discussion this last six months that was way overdue. Only though the concept of transparency will we get back to trust. It’s going to really drive customer choice. Trust will drive customer choice because the customer has to have the choice about exactly where they want their data and how to manage it and see it and it cannot be anonymous. I think our model is closest to where we need to go: customers can choose what country their data is run out of. They can go into the data center, see it and monitor it. Tech vendors have to provide complete and total transparency and can’t pin it all on the government. We’re moving into a world of opt-in transparency.”

RS: “The debate has begun. It’s really good that the debate has begun. We came out of 9/11 in 2001 and the pendulum really swung towards security. Now people are saying ‘security versus privacy - there’s a balance here’. At the end of the day the customer needs to have a say where that pendulum sits.”

Verdict

I'm going to leave the final word to moderator Colony who cites the main takeaways from the discussion as:

  • The age of the customer underpins what’s coming next in tech: context-driven systems, the Internet of everything, and customer-centric software.
  • Much of the Internet of everything will focus on personal care and health.
  • These leaders want more transparency from the Obama administration regarding privacy — critical to regaining customer trust.
  • Total privacy is history. The national security concerns are too great. In the future, the best that people can hope for is that 90% of their data will be private.

 

Disclosure: at time of writing, Salesforce.com is a premium partner of diginomica.