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How 100-Year-Old Companies Move at App Store Speed

Unlock data and unleash the power of developers with API platforms
Chet Kapoor
Sep 16, 2015

What do McDonald’s, Walmart, and Amazon have in common?

They’re all companies that were created to take advantage of change—whether it’s societal change, supply chain advances, or the arrival of e-commerce. Their founders built visionary businesses that disrupted their respective industries and the established players that had created those industries.

Much like the agile tech startups of today, these businesses were built to capitalize on change. But taking advantage of digital technology and the new expectations of consumers isn’t just the realm of companies founded since the advent of the smartphone. It’s about remodeling, too.

Companies—many of them over 100 years old—are rebuilding their businesses around digital technology. They have to—every business has to be “digitally remastered,” as Gartner analyst Mark Raskino puts it. Those that don’t become irrelevant.

Take the U.K.’s Pearson plc, which was founded in 1844. Over the past five years, it transformed itself from the world’s largest educational book publisher to a successful digital learning platform.

Companies like Pearson are doing this by becoming digital platforms. But how?

Bridging the gap

Most Global 2000 companies that were founded 50 to 100 years ago still operate with a product-based value chain.They spent decades investing to deliver products that generate profits in the pre-digital world.

Sure, they invested in technology: backend systems, websites, and maybe even a web sales channel.

But most of this investment and optimization happened in a different world. Now, smartphones are ubiquitous; they’ve become the dominant digital experience. The cloud has become the norm and the Internet of Things is taking off. Customers expect you to move at “app store pace”—they want new features quickly, and updates every two weeks.

This has created a tremendous mismatch between what everyone wants and what enterprises can deliver. Companies that try to repurpose their systems of record to create connected experiences for customers find it is a very painful process and mostly a losing proposition.

The only way to enable the enterprise to deliver apps and experiences at the speed of the app store and at enterprise scale while enabling existing backend systems to keep running reliably and securely is to engage “two-speed IT” or “bimodal IT.” Old technology doesn’t work for this new approach. It requires new technology in the enterprise stack. It requires building a system of engagement to bridge the systems of record and the interaction layer. This is an API platform, and it sits on top of systems of record.

A welcome mat for developers

Developers build on platforms—on the layers that sit on top of backend systems and enable secure access to the data that powers apps. They’ve conquered the phone, building on iOS and Android platforms, and are well on their way to conquering the car, the factory, wearables, healthcare … and pretty much everything else.

To move at app store speed, these developers need to be served. Every business has to have a vibrant developer ecosystem, whether it’s a team of developers inside the corporate firewall, or thousands of developers “in the wild.”

The platform business equation

What’s the lifeblood of connected and intelligent apps and experiences? Data. And data is something that long-established companies have a lot of.

All of this data is stored in systems of record, and it’s all got to be liberated for developers. That’s how they build the experiences that drive a company’s interaction with customers who are holding connected devices—or wearing them, or driving them, or controlling the temperature of their homes with them.

Bring together data that is liberated from long-standing systems of record, a vibrant developer ecosystem, and platform technology, and a 100-year-old company can remake itself into a platform business, move at app store speed, increase market capital, and remain relevant to its customers, partners, and employees.

 

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