True “Transformation” Is When the Logos Change

One of our favorite overused terms in tech is “transformation.” The reality is that in this industry’s history, I can count on one hand the number of times when true transformation has occurred.

First was Cloud Computing. In 2004, when the idea of computing resources in the cloud was being proposed, if one were asked to bet on who would provide that service, the answer was probably a combination of IBM, Hewlett-Packard (HP), EMC (now part of Dell), or Cisco. They certainly had the tech, critical mass, and market awareness to do it.

But what made them famous also prohibited them from innovating. They were the ones with everything to lose, as cloud economics soon came to dictate that name brand proprietary hardware was far too expensive.

It was a then online retailer called Amazon who saw the long-tail, low-margin economics akin to retail as attractive in cloud computing, and the rest is history. During that time to today, IBM’s stock has moved from $52 (Jan. 2008) to $235, Cisco from $18 to $60, and Amazon from $62 to its record high of $3,515 in 2021 — roughly a 5,600% increase.

The second time was server virtualization. For decades, IBM and HP all offered compute virtualization, but it took a new company called VMWare, which didn’t have a stake in the server world, to commoditize it. They were the ones with nothing to lose and everything to gain.

The big automakers had been toying with electric cars for decades. But they were always fringe players on the outer range of the market bell curve. Toyota sold 100x more Camrys and Corollas than Priuses. It took Elon Musk and Tesla to truly disrupt, and after barely escaping bankruptcy just three short years ago, Tesla now enjoys a market cap greater than the top nine automakers combined.

So, give pause when analysts are talking about a sea change. Profound transformation is when the logos in front of you change.

That’s when you are witnessing something truly remarkable.