engineering efficient, scalable systemsthe race to zero
Very few industries today can claim to be able to increase margins, amidst the onslaught of digital competitors. Digital is challenging the absolute fundamentals of how businesses operate.
Banks are being challenged by Fintechs who can operate their businesses at drastically lower margins. Insurance companies are embracing blockchain and cognitive computing to slash the need for human intervention, in order that their products can remain in demand. Telcos are facing the emergence of new threats, where legacy infrastructure becomes a liability in the face of fast improving mobile networks and peer to peer technologies that are slashing margins. Citizens are demanding that government services are delivered at the efficiency of the private sector. Cloud compute utility costs continue to fall with rising volumes and competition. Some call it “the race to zero”.
As more business becomes digital, the cost and efficiency dynamics of business fundamentally changes. Legacy costs associated with people, premises and physical infrastructure start to come down. Computing and platform costs increase commensurately with the rise in workloads and customer engagement. Running digital platforms and IT cost effectively and efficiently, becomes a business imperative. The need to be relentless in driving this efficiency is a key ingredient of digital business success.
Some staggering statistics
- Global cloud IT market revenue is predicted to increase from $180B in 2015 to $390B in 2020
- In late 2016, Amazon Web Services announced their 53rd price cut, reflecting the falling cost of cloud compute utility
- Fintechs could cost banks 60% of their profits according to McKinsey