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COLUMN: Politics, The Cloud, Edge And Creative Destruction

The Channel Company's Executive Chairman Robert Faletra cautions against listening to politicians when they talk about the evils of high-tech.

The world of creative destruction is so pronounced in high-tech it’s almost laughable when politicians begin talking about all the wrongs that need to be righted.

Presidential candidate Elizabeth Warren’s call to break up Amazon, Google and Facebook is very likely more of a PR stunt to get press coverage than it is a serious discussion point. Meanwhile, as demonstrated by the Congressional hearings around Facebook, the pols in D.C. have such little knowledge of technology they struggle to ask any relevant questions.

Regardless of where all that goes, what will continue to happen is the creative destruction that has always pushed the technology industry forward.

High-tech is a very complicated supply chain that depends on past achievements to deliver new advancements. Every time those of us who have been around for a while hear someone outside the industry talk about how high-tech players own a market, are taking over an ancillary industry, or have pushed the limits to the point things need to be regulated like a utility, it produces a chuckle.

If you read Nicholas Carr’s book “The Big Switch,” his premise was cloud computing meant we would be buying IT like electricity. That didn’t happen nor will it. The reality is cloud is an enabler and it is now enabling the next advancements that include the Internet of Things and edge computing. Both will challenge and push past the cloud in importance.

It’s the circle of life in high-tech. Today’s breakthrough seems and is remarkable for its time. It produces a new set of competitors that attack problems differently. They in turn obsolete some of the great players of the past and grow rapidly for a time. Some of the big-name players of yesterday adapt and survive but often not at the same level of influence they once wielded.

The phenoms of today grow rapidly and seem to be unstoppable. That is, until they too are disrupted by a future advancement.

Amazon, Google and Facebook are all dominant in their space today. All of them have yet to hit the real business challenges that every business does at some point. Ironically, the two biggest government challenges that resulted in consent decrees in high-tech were made against two companies that weathered the government action and are still around: Microsoft and IBM. Microsoft is in as strong a position today as it was before.

The biggest challenges for all businesses both high-tech and otherwise will continue to come from the forces of creative destruction. What is a bit different today is some of the Democratic presidential candidates seem to be focused on finding a rallying cry around the evils of some high-tech businesses. A real argument can be made around privacy and the need for the individual to at the very least participate in and have real options surrounding how the information gathered about them is used, if at all.

But that’s not something easily absorbed in a sound bite.

So as we head into the next presidential election cycle, there is going to be a lot of noise and attempts to capture the media attention by dragging some high-tech players through the ringer. We’ll likely see a few more made-for-TV Congressional hearings that happen to show a presidential candidate or two chastising a high-tech executive.

In the end, those same executives getting raked over the D.C. coals should remind themselves that the much bigger threat to their business isn’t sitting in those committee hearing chairs that are perched high to project a position of power.

It’s the young student in the the dorm room who together with a few friends has a better idea on how to make technology stand your business on its head and spin it out of control. They are the real power.

BACKTALK: Make something happen. Robert Faletra is Executive Chairman of The Channel Company. You can contact him via email at rfaletra@thechannelcompany.com

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