Corporations need to follow IT's lead

Corporations need to follow IT's lead

In case it isn't obvious, we are in the midst of a fantastic global transformation. Our parents and grandparents didn't experience one, but our great-grandparents and great-great-grandparents did. They saw, and participated in, a similar transformation when the world went from being strictly an agrarian society to an industrial one. New developments, such as the telephone and reliable paper mail, made business thrive - and the world was changed forever.

Now it's changing again. The global reach, common platform, and sheer potential of the Web have made the business community transform. To date, this has mostly come in the form of successful Internet start-ups. Wall Street has showered these companies with astronomical valuations, but the real winners are likely to be traditional bricks-and-mortar businesses.

The problem is that these traditional companies just aren't moving fast enough to take advantage of the shift.

Many corporations simply can't muster the motivation to fundamentally change their business. But for the sake of their shareholders, they'd better, or they're likely to get bowled over by the next killer start-up like Amazon, eBay, or E*Trade. Unfortunately, too often the historical market leader attempts to change only after it is broadsided by a start-up company.

The best examples of companies that lead, rather than follow, are ones in the computer industry. Traditional industries should take a look at the "whats" and "whys" of these companies' transformations.

Take SAP. It has built its very successful enterprise resource planning business by working on any database platform. For many of its current and potential customers, the Web serves as both a business conduit and a potential platform. But it appears that the Web is causing SAP to rethink the role of the database in its business model. As such, it is willing to do a near about-face on database decisions - and to do so before Oracle gets a solid foothold in SAP's traditional market.

Dell is another example. Its constant vigilance and focus on leveraging the Web to tighten its relationships should serve as an example for any company, regardless of industry. While many talk about Dell's direct business model, observers fail to look beyond that and see the stellar job Dell has done in integrating within its supplier and support model.

But the best example of all is Microsoft. Despite what you may think or say about its products and business tactics, it is probably the most awesome corporation in the world. While producing record revenues and profits, it is fundamentally rebuilding its entire business around the Web. Traditional call-centre applications are being brought to the Web. Whether in support information, product updates, or business paperwork, Microsoft is changing itself to compete more effectively.

This change shows up in its products. Core technologies such as Office, BackOffice, and development tools are being redesigned with this new business opportunity in mind. At this week's TechEd, developers will learn more about Microsoft's substantial shift from its past naturally evolutionary product developments. Key technologies such as Component Object Model+ (COM+), Windows API, and knowledge management will have critical changes aimed to refocus Microsoft on this new plateau.

The good news is that SAP, Dell, and Microsoft aren't the only examples companies have to study. Companies such as Citrix, Novell, and IBM are fundamentally rebuilding their products to project their historical strengths into this new Web space.

Many corporations need to learn from these aggressive pre-crisis transformations. To be successful in this new economy, traditional corporations need to aggressively address their marketplace - because if they don't, they can become the next Barnes & Noble, constantly striving to catch up with some unknown start-up with a market currency substantially greater than that of the established players.

Is your company ready to make the transformation?

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