In the past few months, I've written several posts on the impact of digital transformation, such as this one outlining how IT needs to change, as well as a few on the topic of the need to expand the Internet edge. I thought it would make sense to now discuss how the two are related. In fact, it's my belief that the expansion of the Internet edge is a key component of the shift to a more digital world.
The term "digital transformation" has become one of those buzzwords that everyone likes to toss around, but I think it's important to understand what it means and the implications of it. In a digital world, competitive advantage isn't determined by which company has the best widget or the lowest price. Market leadership in a digital world will be based on the organizations that can differentiate themselves in the way they engage customers.
For example, a lot of companies sell athletic apparel, but the focus for these organizations is now on building health portals. Check out nike.com and underarmour.com. Both websites let customers track activities, set personal goals, measure improvement, and even challenge friends to increase competiveness. Athletic clothing has become less about the actual products and more about the online experience, meaning Under Armour, Nike, Adidas and others have become content companies.
A digital world is predicated on the concept that everything becomes content, and the ability to analyze the information and deliver it to customers is the way to monetize the content. This means more customers interacting with more websites more often. In 1980, the Buggles wrote a song proclaiming that "Video Killed the Radio Star," but in the digital era, video will become the killer of the Internet. In fact, many customers today experience slow Internet during evenings and weekends when the usage of Netflix and YouTube at are at a high point. Now, consider the impact when every business starts to stream video.
As digital transformation becomes more prevalent, everything becomes content, driving the requirement for the edge to expand. If a digital world is going to provide the experiences that people expect, there needs to be more than eight locations where content is processed and distributed. The experience is mediocre today, and most businesses haven't even started down the path of becoming a content company.
Most C-level executives I've talked to about this understand that the winners and losers in their respective markets will be determined by the online experience. However, what some may not understand is that the online experience isn't just the user interface. It's also determined by the speed and the quality of experience.
Once businesses understand just how important the speed of experience is, this will increase the demand and raise the importance of the edge. The providers of data center services that serve large enterprises will need to adjust their strategies accordingly, and not just build more data centers in more cities, but actually push the edge to more locations.