Why High Tech Should See All Businesses As Technology Companies

Joerg Kaufmann

Once upon a technologically simpler time before mobile technologies, automakers built cars instead of developing mobility solutions. And producers of computer peripherals sold printers rather than office services.

But then smartphones, computer tablets, and other mobile devices led to the on-demand, sharing economy. With unexpected products and services made possible by the Internet, online innovators began disrupting both traditional and high tech businesses.

Examples of disruption

One example of a traditional business literally driven to change is luxury car manufacturer Mercedes-Benz. It has moved into the short-term rental market through the Car2Go subsidiary of its parent corporation, Daimler AG. With services like Blacklane and myTaxi, Mercedes Benz competes with Internet-born companies such as Uber.

It is doubtful that a private owner of a Mercedes-Benz would be willing to rent it on an ongoing basis to strangers. However, if you live in one of the cities in Europe, Canada, or the U.S. where Mercedes Benz offers the services above, you can purchase a short luxury ride for much less than a day’s rental.

In contrast to Mercedes’ foot in the technology door, IBM spinoff Lexmark was a member of the high-tech family from its birth as a producer of printers and other digital office equipment. Now it is growing beyond manufacturing and into creation of document management services for businesses that require secure, organized file sharing.

Business boundaries are changing, and as they do, the question arises as to exactly what a technology company is. Furthermore, why should the high-tech industry shepherd more companies into its fold?

Defining a technology company

The definition of “technology company” varies widely.

In 2015, the Gigaom website interviewed Elizabeth Spiers, founding editor of Gawker, about what makes a digital media business a technology company. Spiers indicated that if content rather than technology is a media company’s primary product, it is “not a tech company.”

But Chris Dixon, of venture capital firm Andreesen Horowitz, countered that, stating, “The most interesting tech companies aren’t trying to sell software to other companies. They are trying to reshape industries from top to bottom.”

The New York Times gained yet another definition from Mark Zandi, chief economist at Moody’s Analytics in 2015.  Zandi said that being a technology company “means more than just producing hardware or software. It is synonymous with innovation, research and development, long-term thinking.”

But New York Times reporter Jim Kerstetter concluded that all companies are tech companies “at least a little bit.” For example, he noted, “Some Wall Street banks employ more tech workers than all but the biggest Silicon Valley companies.”

Helping companies redefine themselves

So we return to the question of why the high-tech industry should see and foster all businesses as technology companies.

Current high-tech companies can aid businesses of all sizes that need a hand up onto the merry-go-round of rapid digital change. Part of this boost involves helping companies see how new technologies can improve operations and perhaps expand what they do.

The hope of expanding revenue drives this process from both sides. Helping a company to compete better in the digital world and becoming a digital competitor both may lead to greater earnings.

Writing at Forbes in 2015, Jacob Morgan noted that all companies have digital needs. Examples he gave ranged from agricultural businesses using up-to-date, Internet-connected gadgets to real estate firms coordinating large networks of agents.

“Today it doesn’t matter what industry you are in, how large or small your company is, or where your company is located,” Morgan wrote. “Every single company today is a technology company.”

Morgan implied that learning to be a technology company at some level is necessary for survival. He concluded that companies outside the current high-tech industry must “embrace” digital change, because “technology is one of the most disruptive factors that also yields the greatest opportunities.”

Companies that do not keep up with digital change may find that other more innovative businesses are cutting into their revenues and growth. The high-tech industry can help turn around this vulnerability.

Finding the future of innovation

In an article at the Re/Code website, industry analyst Ben Bajaran last autumn indicated that innovation is blurring the lines between the high-tech industry and traditional businesses.

Bajaran wrote that companies he thinks will be most technologically interesting in the future are ones “that today we would not consider tech companies.”

According to Bajaran, consumer demand is increasing for products such as beds that respond to sleepers’ needs and sports equipment that analyzes athletes’ tennis and golf club swings. Bajaran pointed out that this is decreasing costs for sensors, microprocessors, memory and even software.”

Practical, everyday objects improved through technology may be more exciting in the future than Sci-Fi devices that engineers create “just because the technology exists,” Bajaran said. He mentioned Google Glass as a product that did not meet a consumer need.

Of course, technological products may exist long before their greatest marketable purposes became clear. It is also true that today’s must-have product may become tomorrow’s discard. As technological change continues accelerating, businesses may find themselves upside down if they don’t keep pace.

This leads us back to Mercedes-Benz and Lexmark.

Mercedes-Benz is becoming an affordable choice for drivers who are willing to forgo ownership and leases. It may seem odd, but due to innovation via the Internet, a prestigious brand now is able to maintain its luxury status while also becoming a somewhat frugal choice.

Meanwhile, Lexmark remains in the high-tech game because of its agile reinvention of purpose. Perhaps the digital industry can redefine itself overall by choosing to reach out and guide businesses that are trying to change. Every company needs to become a technology company if it wants to survive, and every high-tech company needs to adapt as well. Leading by example is powerful.

For more information on how digital transformation is impacting all aspects of high tech business, see High Tech. Reimagined for the New Economy.

Joerg Kaufmann

About Joerg Kaufmann

Joerg Kaufmann is solution manager of High Tech at SAP.