Technology Paradigm Shifts How We Work

by Eric Tsai

We are in the middle of a second major paradigm shift in IT (information technology).  This is not about simply going from web1.0 to web2.0, but something that’s going to have a major impact on how we work. I am referring to the disruptive force of “cloud computing.

I’ve been focusing on brand strategies in the technology sector for quite some time now and I’ve seen some resemblance in cloud computing hype similar to that of social media on the web.  Further investigation led me to identify some of the underlying implications and the cumulative impact of them on businesses.


Image courtesy of Wikipedia

Primary Characteristics

Cloud computing is basically a dynamic computing environment that’s delivered over the internet with on-demand resources that are scalable and flexible. In the old days businesses had to purchase hardware, software and then hire IT staff to manage them.  With cloud computing, you simply pay for the service on a per usage model, as known as software-as-a-service (SaaS).

Benefits: Eliminate the risk of owning and maintaining software, hardware and hiring resources. It allows business to shift from capital expense to operating expense (think of it as leasing instead of buying) typically with little to no upfront costs.

Concerns: Still in the early stage of the hype cycle, unproven ROI, and slim margins.  Market is not completely ready to accept this model, but few early adopters have incorporated cloud with existing infrastructure forming a hybrid hosting model.

Social Media is a dynamic publishing technology that’s highly accessible and scalable taking place on the internet. Traditionally, brands have mostly monologues with their customers via old media such as TV, newspaper, magazines and PR.  With social media, you have real-time dialogues (such as Twitter) that encourage interactions allowing people to connect globally to form relationships.

Benefits: Potentially an inexpensive low barrier to entry marketing vehicle compare to traditional media channel. Allow businesses to expand their reach and own their channel of media distribution. Great for customer relationship management, reputation management, and has the ability to go viral.

Concerns: Also in the early stage of the hype cycle with indirect, difficult to measure ROI.  Consumers aren’t all ready to use social media to communicate with brands, and there is a lack stickiness in user adoption (with the exception of Facebook maybe).  Brands that had success leveraging social media use it in the hybrid marketing model in conjunction with traditional media.

There are some similar characteristics with both cloud computing and social media.  Mainly both are fresh concepts that challenge the traditional mindsets. In addition, both adoptions are accelerated by the current economic downturn forcing companies to reduce financial and operational risks associated with technology (so going with cloud makes more economic sense) while evaluating new ways to market  their products and services (more cost-effective brand strategies).

Frankly I find it interesting that one of the earliest form of cloud computing is ironically the first online social media tool – email.

When I created my very first email account on MSN Hotmail back in 1995, little did I know that’s the first form of cloud computing. Since then I’ve been socializing with family and friends sending emails back and forth, reading replies like comments on a blog post, or simply write short messages in the subject line without content similar to micro-blogging.

Today, email is mostly delivered via the cloud (over the internet) and is arguably the original online social media tool.

Relevance to Businesses

Even in these cost-conscious times, the moniker “trusted advisor” or “trusted brand” still holds value as customer relationship is the top priorities for many businesses. This is why social media became an attractive tool for companies now because it’s all about servicing the customers and optimizing client engagement. End users look to experts to guide them via the decision making process of purchasing branded products and services.

As the IT landscape continues to evolve, we need to rethink how we work, how we sell, the tools we use and the processes we implement.

Nobody wins competing on price alone, even private label brands are thriving by providing excellent value-for-money propositions against premium brands.  We have entered into a new era of converged technologies where IT solutions are driven by business needs and management needs to focus on building meaningful trusted relations moving forward.

The secret is to stay relevant with IT and seek new ways to abstract value out of your business.

This is the time to strengthen your brand and focus on your brand strategy.  Review your operational status and plan for future growth is the key to success when economy starts to rebound.

To Be or Not to Be: The Job Question

by Eric Tsai

Hey everyone, I added some photos to my ongoing public exhibition: Brands, Spaces,  Interactions – my investigation using iphone and social network tools.

While I was away in the past few days, I received an email that I found appealing. It was from a reader asking for advice and he sounded confused.  I can relate to the concerns and the emotions from this person so I am going to discuss it.

Here it is:

Hello Eric

I was following twitter stumbling to your blog. I’m deeply intrigued with the posts of who, what, when to sell the stuff. I understand you’re in multi-disciplinary fields. I’m not sure if architecture is one.

I myself am into fields of architecture. The prime question is it worth going into. The job doesn’t offer much money. I’m looking into a field that is related to architecture with a more promising paycheck and job security.

I’m just wondering in your knowledge if architecture is a job to enjoy with all nighters and high competition


My first thought: to sell what stuff?  Why be so concerned about money?

The Way Fear Works


The question outlined in Quincy’s email is defined by fear.  According to fear, you must not take high risks and play your cards save.  I’m concerned about a stable source of income.  If I get a job, I get security.  If not, either I’m not good enough or it’s too competitive.

Well — I hope nobody thinks that way especially in the creative fields.

As Quincy raises the question at the end, I know architecture is a job with all nighters and high competition.  I know the job doesn’t offer much money; I know how a promising paycheck can ease fear of job security.

See, I prefer to be working for something that I believe in, I want to make an impact everyday.  Unless your passion is making money, do you know your passion?  Getting an education is one way to find out about yourself, but the reality is you won’t know until you test out the water.  Fear can be good if you learn to overcome it and use it as an inspiration.  When successful people get together, they either like to talk about their passion or their mistakes.

Logic And Emotion

The biggest challenge everyone faces today is balancing logic with emotion.  It’s hard to believe, but you’re the one creating the fear by believing it. What bothered me was that Quincy seems to be a creative person and his fear is dictating his logic.  He’s in the field of architecture, he should know if he enjoys the all-nighters and the competition there.

Ironically, I had similar situation from my younger brother who is a landscape architect.  He was laid off last year, frustrated, and depressed.  In fact, many times he thought about changing career by going into real estate or become a Wall Street trader.  I encouraged him to look inside his heart and search for his passion.  He started freelancing and has since picked up some clients now.

Let me be clear – income is important. But try using your logic and do something each and everyday to get closer to your passion.

I am not a C-level executive, and I realize that I didn’t enjoy being one.  I’ll write more about this later, but on my cards it usually prints creative or marketing director instead of CEO.  When someone asked me, “What do you do?” I simply say I do design and marketing – two things I really enjoy working on. If your life (including career) is driven by fear, I think you will have a high probability of a mid-life crisis down the road.  That’s when you realized you don’t like what you do or who you married then you buy a Porsche and dress like you’re in your 20s again.  Instead of trying to conform to your fears, spend your time conquering them will benefit you in making logical decisions.

Focus On Your Passion Will Go A Long Way

When I first started doing web design in 2000, there were very few tools and freebies like what’s available today.  Everything has to be hand coded with some knowledge of HTML, image editing, and web servers.  Now majority of the web publishing are done by none technical people – fast and easy.

Does that mean there is no job for web designers anymore?  No, it simply means only the strong survived.  And those that endured the commoditization storm are required to do more while getting paid less.  One thing is certain, web designers are more incline to stay competitive when they’re fond of doing it.

The key take away is this:  most jobs will become scarce.  I call this the evolution of commoditization. It means a job will loose its value over time with the availability of knowledge and technology.  When knowledge becomes ubiquitous, it’s easier to obtain and retain for people, creating excessive supply of qualified candidates.

hypecycleIn business, commoditization arises from business process automation in an effort to reduce the steps required to do the same tasks.  Less steps means less labor, less labor means less resources or people to do the same job. Technology accelerates this theory as described in “Why Business Models Evolve and How to Stay On Top.

When a new niche or industry is created, the people that benefit the most will be the early adopters.  Still, they have to keep up with the rate of change in order to stay relevant. If you don’t like what you do or lack passion you will most likely treat your job as “just a job.” It’s why sometimes older, more senior level employees are replaced by younger, more passionate ones.

How a paycheck comes is up to how much you are willing to put in.  Perception is reality we all must overcome our fears to stay on top of our game.

When one door shuts, another opens.

Why Business Models Evolve and How to Stay On Top

by Eric Tsai

A business model is the framework of how a business generates revenue and profits. While most proven business models can be profitable for a long time, it is just as important to realize that they evolve.  And when they do things could fall apart quickly.

If you’ve been keeping up with my Twitter tweets lately, you know I’ve been linking some statistics about how newspaper is going away and landline telephones are dying. Both are  examples of an older business model getting obsolete in favor of newer models.

Business models evolve for 3 reasons:

  1. Technology Disruptions – Technology changes consumer behaviors and the perception of value.  It is also the main driving force behind creating new technology.
  2. Commoditization – When a product or service lacks tangible value, it becomes a commodity that simply competes on price alone.  When a business model is commoditized, it will be forced to sell on quantity to scale the business.
  3. Competition – While competitiveness is good for most industries, excessive competition or lack of competition can result in a changing business model.

The perfect example for technology disruptions is the impact of internet on print media.  Instead of reading the newspaper, there is now a better way to get the same information faster, easier, and freely  You get the information you want on-demand and can share it with anyone while reducing paper usage.

The commoditization of cell phones is the end of landline telephones.  Today everyone I know carries a cell phone–even the elementary school kids.  I turned down an offer for a year free landline telephone service by my Internet provider Cox Cable simply because I see no value in having it unless they pay me.

Competition is the most obvious element of why business models evolve but it’s also a contributing factor to the first two elements.  Similar to the “the tortoise and the hare” story, the lack of competition can kill innovation if the market leader starts to relax and falls asleep on the competition.

A good example is the rapid adoption of Google Apps over Microsoft Office. For a long time Microsoft was at the top, in control and profitable…then came Google with its “freemium” business model, earning consumer trust and gaining user base faster than ever.  Once thought of as just a search engine company, Google is disrupting the space that Microsoft created, forcing it to lower its price, commoditizing its own product.


So How Do Businesses Stay on Top?

If your business doesn’t create the technology and you don’t have unlimited resources and capital, the best way is to focus on creating value for your business.

Here are some business drivers to consider:

  1. Focus on customer retention and satisfaction
  2. Build a recurring revenue stream
  3. Expand your offering and create value-added product or services
  4. Strengthen your brand and build equity in your business
  5. Build barriers to insulate competition and commoditization
  6. Execute on broader vision and take calculated risks
  7. Don’t rely on technology – become a platform company
  8. Network with strategic partners and empower your management

It takes a combination of all the above to stay near the top in a highly competitive landscape.  I will discuss them in details on later blog entries.

What are you doing to stay on top in this recession?