six things everyone should know about digital disruption pdf

Masters of Strategy Digital Disruption …

Dimensions of Strategy . com

“Six things everyone should knowabout digital disruption …

John Ashcroft PhD BSc.(Econ) FRSA





1 World Population Trends …

2 Mobile Phone Expansion …

3 Connected Devices …

4 The Internet of Things …

5 The Challenge of Data …

6 Data Storage …

7 Conclusions

“A threat to business goals and or financial objectives which can be attributed to a

digital product or platform online.”

Is population growth an influencing factor in digital disruption? Not really!According to the UN World Population data, in 2015 there were 7.3 billion people on the planet. Up from 2.5 billion in 1950 and 5.4 billion in 2000, the world will experience further population growth to 9.7 billion by 2050. Numbers are continuing to rise but the growth rate is slowing.

The average rate of world population growth (CAGR) over the last sixty years has been 1.7%. The projected rate of growth of population is set to slow to just under 1% over the next forty years.

Greater longevity is offset by lower fertility rates. The world is in a steady state of growth. No evidence in the basic population data to support the digital disruption and exponential disruption phenomena.

1 Is population growth an influence in digital disruption ?

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Greater connectivity around the world is one of the factors facilitating disruption. The number of mobile phones in use has increased rapidly over the last fifteen years.

By 2016, total volume (mobile phones) increased to 8.5 billion compared to a population of just 7.3 billion. There are more phones in use than people on the planet. No wonder, some claim there are more phones than toothbrushes. The phenomenon will not persist forever. We forecast the trend will reverse around the turn of the century. The day of the toothbrush, will return but not for some time yet. By then toothbrushes may be connected to the internet, with feed back on flossing performance and dental decay … but wait we move too fast ...

The number of smart phones has increased from less than one billion units in 2010, to approximately 3.2 billion last year and 4.1 billion this year. Conventional mobile (non smart) stocks peaked last year at around 5.5 billion. They are set to decline to 3.3 billion in our model by 2020.

We expect the number of phones in use to peak at 9.0 billion in 2020 as the total stock of smart phones increases to just under six billion units. Product life cycles dominate the analysis, in this and in all things.

2 Mobile Phones … improving connectivity on the planet …

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Of course there are many ways to connect to the internet. We expand our research into “Digitally Connected Devices”. We include in our analysis - desktops, laptops, tablets, phablets and phones. According to our dataset, the number of “Digitally Connected Devices” has increased from less than one billion in 2009 to around 5.0 billion in 2014.

We claim 2016 as the year of singularity when the number of digitally connected devices, equalled the number of people on the planet. From a level of around 7.4 billion this year, we forecast the number of digitally connected devices will increase to around 11 billion by 2020, peaking around 15 billion by 2030.

3 Connected Devices … 15 billion! assisting the process

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“2016 as the year of singularity”


To the list of digital devices we add home appliances, connected clothing, medical devices, transportation, buildings and cities.

Smart bodies, smart homes, smart cars, smart grids, smart farms, smart roads, smart cities … “Get Smart” will take on a whole new meaning to digital urgency.

"Things" as an "inextricable mixture of hardware, software, data and service is the legal definition. People will be connected to the internet via internal and external devices. The pacemaker hooked up to the mainframe offering real time analytics. The digital dispenser offering feedback on medicine consumption and dosage levels. The nano bots coursing through the veins relaying important data on cell counts, sugar levels and genomic disorders.

As the cost of chips fall, along with the cost and time of processing the data, the “nerd nirvana nears”. Data storage is made available and the data challenge becomes enormous. What secrets to predictive modelling will be extracted from the huge data flow?

Access to market has never been easier and cost of acquisition has never been lower. It is an exciting time for those with the right attitude and the right software to process the data and provide the service.

4 The internet of things … 50 billion connected devices by 2020

Digital Disruption

And what of the internet of things?

It is estimated the number of “things connected to the internet” could be over 50 billion by 2020. This may well be true. It could even by higher. According to Gartner, there will be nearly 21 billion devices on the internet of things by 2020.

ABI Research estimates that more than 30 billion devices will be wirelessly connected to the internet by 2020. 50 billion appears to be a reasonable assumption assuming our 11 billion digital connected devices is correct.

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“Get Smart” will take on a whole new meaning”


In 2015, we probably produced more every day since the birth of the printing press in the first 555 years. The rate of increase is exponential. Videos, photos, audio messages, blog posts are streaming onto the internet in ever increasing proportion. That’s lots and lots of information and lots of need to store.

According to the Cisco Cloud Global Index 2015, annual global data centre traffic will reach 10.4 zettabytes by the end of 2019, up from just over 3.4 zettabytes in 2014. Global cloud traffic will reach 8.6 Zettabytes up from 2.1 ZB over the same period. Data created by the internet of everything will exceed 500 ZettaBytes by 2020 up from 150 ZettaBytes in 2015. That’s over half a Yottabyte each year with more to come.

That’s a lot of data. How big is a Zettabyte - think Kilobyte (1) Megabyte (2) - Gigabyte (3) - Terabyte (4) - Petabyte (5) - Exabyte (6) - Zetabyte (7) and still to come yottabyte (8). Figures in brackets are the power factors from the humble Kilobyte. Consider the Encyclopaedia Brittanica is approximately 24 GB in total!

5 The challenge of data … of Gigabytes and Zettabytes …

Digital Disruption

And what data there will be …

And what data there will be! Six years ago, Google’s Er ic Schmidt claimed we create as much information every two days as has been created since the dawn of civilisation and the year 2003

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Digital connectivity is facilitating the process of digital disruption by reducing access to market barriers and reducing the cost of client or customer acquisition. Word of mouth becomes word of byte. The R(0) increases to spread the information flow. There is of course a downside. Product life cycles become more truncated as the life time values fall in periodicity and value.

Storage on the other hand is becoming more accessible to new and fast growing businesses. The failed whale syndrome, identified in our Twitter case study is largely a thing of the past for new businesses. Constant crashes as the MAUs increase should be an anachronism in the digital era. Rapid elasticity is the new mantra for cloud service providers. Start ups and unicorns are able to benefit from the rivalry between Amazon Web Services, Google, HP and IBM cloud.

Personal cloud usage has increased from zero in 2010 to over one billion users this year and will increased to 2.5 billion by 2020. The volume of data stored has increased from zero 2010 to 17 exabytes by 2015 and will increase to 45 exabytes by 2020.

New industries have emerged to accommodate the growth of the digital era and personal / small business cloud storage. Box.com with a market share of over 50% in the USA, lays claim to a 30% share world wide. The company still lays claim to a market cap of $1.3 billion US. Revenues of $325 million have yet to deliver a profit but that is no longer a critical KSF in the digital age.

6 Data Storage … the emergence of a business in the cloud …

Digital Disruption

Data Storage …in the Cloud …

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It is the world of Minimum Value Proposition, get it up and get it right. Marissa Mayer’s LEO - launch early and often and Googles SOAR - send out and revise are the new guidelines for product success.

But in many ways, the old corporate strategy guidelines remain dominant. Product life cycles are so important. Exponential growth rates are merely a phenomenon of the width of the x axis and the size of the R(0).

Understanding the challenges of digital disruption to an existing business player, requires the traditional framework identified in our CBS NEWs analysis. Benchmark and market map, all things at all times. Profile Competitors, Buyers, suppliers and new products, new players, new technologies and new platforms.

Traditional guidelines can serve us well ….

7 Conclusions …

Digital Disruption

Population growth, mobile connectivity, digital devices, the internet of things, data genera t ion , process ing costs, data storage have lowered the barriers to m a r k e t e n t r y a n d participation.

Cost of acquisition, MAUs, l i f e t i m e v a l u e s h a v e emerged as the new metrics for the digital age.

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Cloud and online platforms have assisted the acceleration of virtual companies and the virtual team …

MVP, Get it up and get it right, Launch Early and Often, Send Out and Revise …


John is Chief Executive of pro.manchester*, a member of the AGMA Business Leadership Council and Chairman of John

Ashcroft and Company. He is founder of the the SME Club, the Social Media Experts Site and the Financial Directors Forum. Check out the web site John Ashcroft and Company, along with the Dimensions of Strategy Site and the Apple, Lego,

Twitter and Yahoo Case Studies.

John is a visiting professor at MMU Business School, specialising in Economics, Corporate Strategy, Social Media

and Business Modelling. He is an occasional lecturer at Manchester and Salford Business Schools. He is a regular

public speaker at conferences, lunches and evening events.

Educated at the London School of Economics, London Business School and with a PhD in economics from

Manchester Metropolitan Business School, John is a fellow of the Royal Society of Arts, a Companion of the British Institute

of Management and a member of the Society of Business Economists.

With extensive experience of business and corporate finance, in the 1980s he was regarded as one of Margaret Thatcher’s favorite business men and a regular visitor to Downing Street. He was Guardian Young Businessman of the year in 1986 and

voted (along with Richard Branson), one of the Top 40 Businessmen under 40 in 1987. John has worked with Bain

and Company, Goldman Sachs, S.G. Warburgs, Wasserstein Perella and First Boston completing over sixty corporate

finance transactions. The largest deal valued at one billion Dollars in 1987.


Digital disruption is produced by John Ashcroft

and the Dimensions of Strategy Team …