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November 26, 2013

Big Data’s Role in Civilization 3.0

Alex Woodie

If you’ve suspected that big data and mobile technologies have put us on the cusp of a revolutionary period for humanity, one marked by the merging of physical and digital worlds and a renewed focus on individuals and their relationship with businesses via data, then you’ve hit on what TIBCO CEO Vivek Ranadivé calls Civilization 3.0 and what Qualcomm CEO Paul Jacobs calls the Digital Sixth Sense.

Ranadivé shared his views on the impact that information technology is having on the evolution of business and human society during a keynote address at last month’s TUCON 2013 conference in Las Vegas. He shared the stage with Jacobs, whose company gave him his first job in California many years ago.

“I believe that we are entering a new era. I call this Civilization 3.0,” Ranadivé’s said. In his eyes, Civilization 1.0 was the pre-industrial revolution era, the agrarian revolution. “It was the age of the artisan. People were individual contributors, farmers, shopkeepers, carpenters, painters, and artisans.” The industrial revolution brought us Civilization 2.0, which ushered in the age of the corporation, beginning with Ford’s assembly line in 1913. “Its main focus was to organize people and systems for efficiency,” he said.

“We’re now entering Civilization 3.0 and the availability of platforms where individuals can reach large audiences,” he said. “The emphasis shifts back to the value creators. Civilization 3.0 is about offering a service that delivers extreme value to its constituents.”

Now, it’s true that this phrase–“extreme value”–and versions of it appeared all over the TUCON show, and still pervade TIBCO’s marketing materials. It’s not such an easy thing to separate Ranadivé the philosopher from Ranadivé the CEO of TIBCO to Ranadivé the NBA franchise owner, for that matter. But dig a little deeper, and you’ll find the true meaning of “extreme value” comes out, and that’s it’s not just a marketing slogan.

It’s the Social Network, Stupid

In Ranadivés view, the Civilization 3.0 era began in 2010, when several metrics hit crossover points. Today, there are five forces powering the move to Civilization 3.0 and the increasing importance of social networks in the physical world:

    1.  Data: “If you look at the amount of data that was created from the beginning of mankind to TUCON last year, and you call that X, then in the last year, there’s been 10x data created.”

    2.  Mobile:  “It took 100 years for there to be one billion landline phones. It took just 10 years for there to be one billion cell phones. And it took just 1 year for there to be one billion smart cell phones.”

    3.  The emergence of platforms that allow you to reach large audiences: “It used to be you had to be a large organization in order to be able to reach tens of millions of people.  With the availability of platform like Facebook, YouTube, Twitter and the iPhone app store, its’ now possible for any individual to reach tens of millions of people.”

    4.  The Rise of Asia: “It used to be that China and India were two-thirds of the world economy 200 years ago. Most experts believe we would revert to this situation sometime in this century.

    5.  Math Trumps Science: “You no longer need to know the why. You simply need to know the what. If A and B happened, then there’s a high likelihood that C will happen.”

These forces are driving us toward a Civilization 3.0 world where the relationship between organizations (companies, governments, etc.) and individuals gets radically redefined. “It is the age of service,” Ranadivé says. “You have to really think of your business as a service, and then you have to think of it constituting as a social network, and how you cater to that service, how you capture that network, how you make it a unique experience.”

TIBCO sells big data tools that allow companies and governments to connect with their customers and constituents. If Civilization 3.0 were a war, TIBCO would be the arms maker, selling weapons that allow organizations to transform themselves into social networks by grabbing data, cleaning data, analyzing data for signals, comparing new data against past data, visualizing data, and, finally, instrumenting the insights gleaned from data into new business processes–all with the goal of providing better services to customers.

As the physical and the digital worlds meld, the successful companies will differentiate themselves by the service they offer to customers. The first focus will be on delivering a service and an experience that’s below no other. Once a business does that, the revenue opportunities will follow.

The Natives Are Restless

Civilization 3.0 will bring odd juxtapositions in the business world,

TIBCO chairman and CEO Vivek Ranadivé

said, such as the world’s largest book company without book stores, the world’s largest mobile semiconductor company without any factories, and the world’s largest taxi companies without any cars. When the focus of a business is on providing a service, then the management of the physical stuff is of less importance, and can effectively be outsourced, or sub-contracted out.

Of course, to convert your business into a social network, you first have to speak the new language of the Civilization 3.0 natives, and think like they do. These Civilization 3.0 natives are today’s kids, who look dissimilar to previous generations in a few important ways.

For starters, these Civilization 3.0 natives will never subscribe to a newspaper, install a landline in their homes, check out a library book, or visit a record or a music store, Ranadivé said. They’ll get all their content over the Web, and probably on their mobile device.

This Civilization 3.0 phenomenon is not just occurring in the advanced Western countries. “Kids in China and India are checking their phones 400 times a day, just as kids over here are,” said Ranadivé, who came to the U.S. from India as a boy. “They live their lives off the mobile device.”

Digital Sixth Sense

Qualcomm CEO Paul Jacobs says this merging of digital and physical worlds, or what he calls the “Digital Sixth Sense,” will become pervasive, and change the way we interact with each other and with the world around us.

Qualcomm chairman and CEO Paul Jacobs

“That phone you carry with you will be able to tap into the resources that are around you,” Jacobs said during his speech at the TUCON show last month. A user will be able to tap into sensors, such as microphones, speakers, cameras, and either input it into their phones or output it from the phone into the environment.

Processing of these massive data flows will also be moved back and forth easily between phones and computers embedded in the world all around us. Even battery charging will be done wirelessly, providing an “always on” experience, Jacobs said.

“In the end what this is all about is giving you seamless interactivity,” he said. “Various devices in the environment will be control points. But the idea is that we will get that information into you when and where you can actually make use of it.”

Any lines between cyber space and physical space will go away. “I think we’ll see a completely merging of that. You won’t think in the future of any bright line between cyberspace and real space…It’s about big data, it’s about real time, it’s about getting the right information to the right place and the right group of people.”

‘It Was the Best of Times…’

Every industry will be impacted, and not every business will survive. “We’re kind of in the first inning of this nine-inning game right now. Maybe it’s the second inning,” Ranadivé said. “But we’re going to have everything so lined up. …We’ll have machines basically anticipating and adjusting and doing work for us. It’s just a very exciting era we’re entering.”

Ranadivé is fond of quoting the famous beginning of the Charles Dickens novel “A Tale of Two Cities” when discussing his views on Civilization 3.0. “There will be the 1 percent who do outrageously well, and 9 percent who support those people and get picked up in their airstream,” he said.

The other 90 percent will need to step up their games. “I’m not saying that things are going to be easy,” he said. “Companies have to start thinking about their customer and converting their customers into fans. For individuals, they have to take charge of their own destiny, their own career path, their own education.”

Companies and individuals who adjust to the new big data reality, like the Civilization 3.0 natives, are going to be fine. “It’s going to be the best of times for those who understand how to navigate it,” Ranadivé said, “and for those who are in denial, the worst of times.”

These are definitely good times for Ranadivé and his fellow colleagues in Silicon Valley, who are riding the wave of innovation to vast riches. Ranadivé has said the work done by Facebook, Twitter, Google, TIBCO, and other tech companies in the area is akin to a modern-day technology Renaissance, not unlike the first Renaissance that occurred 400 years ago in Italy.

Ranadivé is a renaissance man himself, insofar as he’s made a successful transition into the world of professional sports. But when Ranadivé and his partners paid $450 million to buy the Golden State Warriors in 2010, people called him crazy, he said, because nobody had ever paid that much for an NBA team (much less for one that hasn’t won a title in more than 30 years).

“If you look at it as a basketball team in the context of Civilization 2.0, you’re probably right,” he said. “I looked at it and said, ‘This isn’t a basketball team. This is a social network.’ What I have to do is use technology to capture that network, expand it…engage it, and provide experiences that offer extreme value, and then there would always be ways to monetize it.”

Ranadivé was forced to sell his stake in the Warriors earlier this year when he was presented an opportunity to buy the Sacramento Kings and keep them from moving to the Pacific Northwest (a move that has made him a hero in the California capitol). “The value [of the Warriors] had more than doubled,” he said. “It’s a proof point to look at your business and rethink what it means in the 21st century. It could be worth multiples of what it’s worth today.”

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