Wednesday, January 17, 2018

Digital Disruption and Changing Business Models

Digital disruption has been with us for  many years. The current trend really began with the emergence of Amazon and Dell, who revolutionized the book and computer businesses respectively. Of course, Amazon went on to wreak further disruption in a variety of industries. The emergence of Google has shaken the idea of digital disruption to its core, with its amazing evolution from a good search engine to a global megafirm with far reaching ventures such as self driving cars.

Netflix offers great insights into the nature of digital disruption, highlighting the ideas of new business models becoming possible with technology - models that enable a company to make more money while at the same time saving the customers money and offering them more convenience. We saw that when they began offering DVDs to customers without requiring fixed return dates and then starting the business of streaming video to compete with cable TV. The disruptions in all these industries have been massive. All the signs are there indicating even more massive changes are coming.

This story is effectively portrayed by PWC in a recent analysis published on their website. Worth a read.

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