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Digital disruption is not a new phenomenon. But the opportunities and risks it presents shift over time. Competitive advantage flows to the businesses that see and act on those shifts first. We are entering the third, and most consequential, wave of digital disruption. It has profound implications not only for strategy but also for the structures of companies and industries. Business leaders need a new map to guide them. This article explains the factors underlying these disruptive waves, outlines the new strategic issues they raise, and describes a portfolio of new strategic moves that business leaders need to master.
Via Kenneth Mikkelsen
Three distinct waves of digital disruption are transforming strategy. Changing information economics enable new strategies - as well as radically new structures for businesses and industries.
In the first wave of the commercial Internet, the dot-com era, falling transaction costs altered the traditional trade-off between richness and reach: rich information could suddenly be communicated broadly and cheaply, forever changing how products are made and sold.
In the second wave, Web 2.0, the important strategic insight was that economies of mass evaporated for many activities. Small became beautiful. It was the era of the "long tail" and of collaborative production on a massive scale. Minuscule enterprises and self-organizing communities of autonomous individuals surprised us by performing certain tasks better and more cheaply than large corporations.
Now we are on the cusp of the third wave: hyperscaling. Big - really big - is becoming beautiful. At the extreme—where competitive mass is beyond the reach of the individual business unit or company - hyperscaling demands a bold, new architecture for businesses.