Cloud and the Business World of 2020

Cloud is the common thread that runs through today’s key IT topics: big data, Industry 4.0, and the digital transformation. SAP Cloud strategist Bert Schulze turns to millennials for a glimpse of the business world in 2020.

At SAPPHIRE NOW in Orlando, Bert Schulze was joined on stage by two millennials for whom the cloud is already very much a reality to find out what the business world might look like in six years’ time.

Paying for taxi journeys by cell phone, collaborating virtually for greater efficiency: For millennials like Amira Polack, these activities are already a normal part of their daily lives. The real challenge, says Polack, is what to do when you come up against a “cloud-less” environment. She recalls the time when, as a student, her apartment in South Africa was broken into and her MacBook stolen – along with all her photos, music, videos, and college assignments. Had Dropbox been as prevalent then as it is today, this would not have been such a big deal. As it was, she had to rely on Facebook and Gmail to salvage what she could. “Sometimes it can be more risky not to opt for the cloud,” says Polack, who now works for SAP Corporate Social Responsibility in Palo Alto.

The Three Business Topics of the Future

Bert Schulze sees Amira Polack, who, along with  IT business student Ben Christensen, was chosen to represent millennials at the “Cloud in 2020 Forum” at SAPPHIRE NOW, as the personification of the future. In 2020, three topics will dominate the world of business, says industrial engineer Schulze:

  1. Big data: The ability to analyze gargantuan amounts of data in near-real time is becoming increasingly relevant. Online games are a prime example. Whereas it used to take five hours to provide a Battlestar Galactica Online player with the decisive tip for entering the next level of the game, it now takes just a few seconds. This is because online gaming developer Bigpoint switched to SAP HANA database technology. “It doesn’t take much imagination to work out the potential revenues from a service like this,” says Schulze.
  2. Industry 4.0: Applications and devices will interact more and more closely with one another. There are already some good examples of this from the field of energy measurement. “Smart meters” are connected up in the cloud and controlled autonomously by central systems, allowing consumption data to flow automatically from private homes into computers at Techem, Brunata, and other energy management service providers. In another example, agricultural machinery supplied by John Deere automatically takes various external factors into account when calculating the amount of fertilizer required for a field – such as the current weather conditions, the type of seeds being sown, and the location of the field. This is what SAP’s Schulze calls the “Networked Economy.”
  3. Digital transformation: At the moment, too many companies are content to rely on the processes that they are familiar with from the analog world and to merely adapt them to the digital world. “But that’s not what the digital transformation is about,” says Schulze. In the future, companies will need to turn traditional approaches on their head and align their business models to match the new processes being engendered by the digital world. German compressed-air system supplier Kaeser Kompressoren is an excellent example. Instead of marketing complete systems, the company now sells “flat rates for air,” with customers pay according to how many cubic meters of compressed air they need. If the system breaks down, Kaeser fixes it. The customer does not have to lift a finger. The idea behind this approach is the “simplification of services,” explains Schulze, adding, “It doesn’t matter whether a customer is ordering 5,000 liters of coffee from Nestlé or a book from Amazon – the main thing is that the process works.”

Fortune 500: Survival of the Most Innovative

By the time these three trends come to dominate the working environment, Schulze calculates that the global middle class will number five billion people and there will be 50 billion Web-based end devices in use (the current figure is 15 billion). In this scenario, says SAP, a company’s ability to source raw materials for production will ultimately decide its fate. Smartphone manufacturers like HTC, Apple, and Samsung, for example, are likely to see their silicon sourcing requirements soar to three times the current level over the next few years. Some companies will simply not be able to meet the growing demand for efficiency. If you check down the current Fortune 500 List of companies, you can see that more than half of them entered the index after 2000 and have only succeeded in establishing themselves by offering more innovative products and services than their rivals.

Efficiency is also one of the key factors cited by millennial Ben Christensen. “My personal cloud experience comes from a resistance to things that slow me and my teams down,” he says. Time is the only resource I can’t increase. So efficiency in what we are all doing is key.” The working environment must also be flexible. “We host our meetings on Cloud Connect, collaborate via SAP Jam on storylines for our campaigns, and use microblogging in online communities … wherever we happen to be at the time,” says Polack, who already appears to feel at home in the world of 2020 today.

For more information, read interviews with millennials Amira Polack and Ben Christensen on SCN or How to Engage Millennials by Bert Schulze.

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