Nov 22, 2022

Business Reengineering and Twitter

The recent and abrupt change in Twitter’s governance model has large businesses scaling back their advertising spend on the platform. Anecdotally, advertisers spend a small proportion of their budgets on Twitter compared to larger scale platforms such as Facebook and YouTube. As a result, advertisers can disengage gradually without completely losing touch with the public.

Potentially worse prospects confront academic researchers, news organizations and investigative journalists. Many of their core business processes depend on Twitter’s capabilities and information sharing formats. All of a sudden, this class of users will be forced to re-engineer their operations. 

All user groups will lose some of the one-to-one communications capabilities unique to Twitter. Could the same thing happen in the IoT industry?

From Humble Beginnings to Operational Criticality 

It is worth remembering that Twitter began as a tool for a group of friends to keep in touch. Over time, it turned into an operational utility for private and public sector service providers. At the outset, Twitter represented a new medium that organizations could use to build and interact with a follower base. Gradually, the Twitter-enabled information exchanges became business critical. Organizations added staff across social media, reputation management and customer support functions. Twitter’s commercial seduction was slow and subtle.

Now, however, my Twitter experience and trade-press reports indicate a markedly worsening signal to noise ratio. The accounts that I am interested in hearing from are drowning in a high volume of irrelevant tweets. That is because Twitter has modified its algorithm to override my carefully curated filters. Other users report a noticeable rise in advertising. 

Incentives That Encourage Platform Dependency 

For small and large users alike, is the sudden fracturing of Twitter’s model something we should have anticipated when adopting Twitter? Might the same phenomenon not be occurring in the IoT sector with platforms that are easy and inexpensive to join?

There are parallels between the adoption dynamics for social media (people) and IoT (inanimate machines and sensors) interactions. Early use encourages deeper integration and business-process reengineering. In the case of IoT, organizations increasingly recognize the value of remotely managing and controlling widely distributed assets. Connectivity is inexpensive. In recent years, new providers have been offering to monitor devices at rates as low as a dollar a month. On top of that, pooled plans allow users to share a bucket of data across multiple devices, further encouraging adoption and usage. There are echoes in the way that Twitter users benefit from large- and unlimited SMS allowances to increase their posting activities.

Substitution is Difficult 

The path to easy adoption carries a hidden price. As innovative technologies become embedded in operational processes, it becomes difficult to pull back. Renegotiating the terms of business can be challenging, especially where there is an asymmetric power balance. The ultimate nightmare is where a provider reorients their business strategy or walks away from the market. In the consumer, smart-home segment, there have been several instances of businesses abandoning the market over the past few years. 

During 2022, a less abrupt but similar phenomenon has played out in the enterprise sector. Some months ago, for example, Google decided to withdraw its IoT platform offering. In the past week, there has been talk of IBM withdrawing its Watson IoT platform offering. In both cases, users have time to work on migration plans unlike present-day Twitter users. It is less clear what users will be able to do about their operational data. Twitter users are sounding the alarm about their data being locked into proprietary protocols. Developers are stepping up with tools to help users to retrieve their data in a usable form.

Strategy and Risk Management Guidance 

The pace and variety of technical innovation places many tantalizing capabilities in front of consumer and enterprise users. In most cases, providers make adoption as easy, inexpensive, and seductive as possible. This is where adopters need to assess and manage the risks of adoption.

Pulling the plug
In the case of IoT, the value propositions and ever-rising competitive benchmarks are two factors that make adoption strategic and unavoidable. Nonetheless, within that context, adopters should plan strategically. That means investing in preparations for longer-term applications and evolving use-cases. It also includes considerations of supplier resilience. What is the risk that technology vendors drop out of the market? Even if they stay in the market, what is their commitment to innovation and a capabilities roadmap to meet IoT’s evolving requirements over time?

Then, if it comes to porting an IoT system from one provider to another, what compensation and support is offered? And, to what extent are porting conditions specified contractually or implied in the provider’s governance model? While porting comes at a cost, users also need to think about whether they own their data and any derivatives, such as digital twins, derived from operational data. 

Twitter’s change of ownership and service offering shows just how quickly the plug can be pulled on newly established operational processes and business support systems.



1 comment:

  1. 30 November 2022 update

    A.P. Moller - Maersk and IBM to discontinue TradeLens, a blockchain-enabled global trade platform

    TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform. Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved. As a result, TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business.

    Rotem Hershko
    Head of Business Platforms at A.P. Moller - Maersk

    https://www.maersk.com/news/articles/2022/11/29/maersk-and-ibm-to-discontinue-tradelens

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