Holger Mueller on Digital Transformation and How You Can Catch Up

You may have seen Holger Mueller, VP and Principal Analyst at Constellation Research, on DisrupTV, speaking at various conferences, or on Twitter via his 32.4K followers. Whatever medium you encounter him through, one thing is clear: Mueller’s expertise and excitement for Enterprise Software, the future of work, and Artificial Intelligence is palpable.

We chat while he waits for his flight from NYC to London to attend Microsoft A.I. and even over the phone, with the sounds that naturally come with being at an airport humming along in the background, it’s easy to see why he’s a thought leader. When I ask how he went from working at some of the top companies (Chief Application Architect with SAP, VP of Products for FICO, Oracle, Kiefer & Veittinger) to becoming one of the foremost experts on the Future of Work and Tech Optimization he laughs and simply replies, “I wanted to look for a new challenge. I built software for 25 years and I was looking for something new,” effectively making the transition from Software to becoming one of the go-to-guys predicting the future of tech sound easy.

He is, however, very serious when it comes to digital transformation and how humans adopt new technologies. In just 20 minutes we cover the way we work today and how we’ll work tomorrow, his predictions for the integration market, and how Artificial Intelligence is going to be used to match your average employee – not your best.

The Technology Landscape and Digital Transformation

KRISTINE COLOSIMO: Let’s talk about the state of work. Of course, there is a huge difference in how we work today versus how we did work say 20 years ago, but is there a difference in how we work today versus how we did work just 5 years ago?

HOLGER MUELLER: Yeah there’s certainly a difference – maybe it hasn’t fully crystallized in the real-world yet, but you see the early onsets of big changes. For example speech recognition on mobile devices. Or take what’s now possible from a big data perspective, it’s clear for most companies that business practices as we know them today will change going forward.

KC: Platform-as-a-Service (PaaS) adoption is predicted to be the fastest-growing sector of cloud platforms, growing from 32% in 2017 to 56% adoption in 2020. Can you give us a little context around PaaS and its place in the market?

HM: Platform as a Service is about 10 or so years old, but it’s becoming mainstream now. In fact, today it’s almost impossible to build software without using a platform-as-a-service or in the cloud. It’s very hard to do things offline for modern development and DevOps tools.

PaaS changes how easy it is to build software. Being inside of an enterprise, in a startup, being a student, these are fundamentally different environments but today, two people at Starbucks with a credit card can build pretty amazing things. They can theoretically become the next Google if they find a better search algorithm than Google has now. There’s plenty of infrastructure-as-a-service to allow them to run it. 10+ years ago this wouldn’t have been possible – you needed capital to buy servers and data centers to put the servers in and a person who knew how to run the servers.

Despite enterprise not changing much in terms of which applications are used (the brand name applications are very much still in play) and how they deliver and consume them for employees, the speed at which an enterprise would run 5 years ago is no longer acceptable today.

The need for the companies to act has gone dramatically up. Business is going faster and PaaS will help enterprises continue to accelerate.

Overall, all business processes are faster which means all businesses need to work faster, generally causing the need for enterprise acceleration.

KC: Enterprise Acceleration is certainly on everyone’s mind. What’s your definition of Digital Transformation?

HM: Digital Transformation is the change of perspectives or the creation of new business models through digital technologies.

KC: Do you think it’s important for businesses to work towards digital transformation? Why?

HM: They need to digitally transform because it’s simply the act of adopting new technologies – maybe in the future those technologies will be the holographic visualization of things, maybe it’s going to be networks and machines we plug directly into our brains. As technology changes and competition increases, a change in ‘best practices’ happens.

The answer to, “How do I run my business today in 2017,” is different from how I ran it in 2012 and will be very different from how it will be run in 2022. So the new question becomes, how can I get the agility that I need for speed? This speed needs to transfer onto the software, and my people, who have to use the software, in order to succeed and become a disruptor potentially – or at least keep up with the disrupters in my industry and not become one of the victims who become disrupted.

KC: Is the fear of getting left behind – or becoming one of these victims who gets disrupted as you just mentioned- the main driver behind digital transformation? Or do you think it’s more Future proofing or innovation?

HM: It’s a combination of all of that – there are different types of companies who have different strategies for transformation. You have the more aggressive companies who actively try to change things. They experiment and hopefully fail fast, move on to things that work and try not to bleed out on something. Then there are the companies who look to these more aggressive companies and try to learn from their mistakes in order to do something right the first time. And you have companies in-between, all the way to the laggers who are afraid of what’s coming and what’s happening and fearful of having their industry disrupted. They hear all the stories about industries that have been disrupted like taxis or hotels via private stays like Airbnb.

Right now there is no industry leader that is not concerned about how digital technology will change their best practices and that they might be too slow in adopting these new best practices in order to stay on top.

KC: If Digital Transformation is so clearly important for survival, what’s stopping businesses from doing it?

HM: The inertia of human nature – we like to keep doing things as we already know how to do them.

The best example of this is the Qwerty keyboard, which at the time of its invention 100+ years ago was high-tech because it would limit a person who types for a living so that they could not jam up the mechanical hammers of a typewriter. It was designed to spread out so far that the fingers could move fast enough to beat gravity – like if we were on the moon we would have a completely different keyboard.

Now fast forward 100 years later, there are no data typists anymore. No one uses a mechanical typewriter anymore, but we still use the Qwerty keyboard.

Human nature is inertia and tied to changing things, and changing things takes guts.

The change of best practices and the fact that we do so much individual typing suggests that speech to type is going to replace the keyboard – there are so many studies that prove that people can speak faster than we can type, so you would imagine that a solution for how much we type today would be fast approaching. But it shows how hard it is for people to change what they’re used to, even if a new solution is better and easier.

When you think about a business, where you have to think about suppliers and customers, it’s even more difficult to change these things. Human nature is inertia and tied to changing things, and changing things takes guts. It’s all about the courage of execs to go to the board and ask for the money to build these things.

KC: To me, being a “Digital First Business” is a mindset and an expression of priorities. It’s saying that you fully embrace digital technologies and want to use it to make your business better, faster, stronger. What advice would you give to a company that wants to become a Digital First Business?

HM: They definitely have to experiment! The cloud is so important because it enables all the major breakthroughs. There are two key things that companies need to understand in order to start experimenting:

• Big data and Hadoop style businesses. Which means that for the first time companies can store all the information they can electronically get a hold of without going out of business from the cost of storage, which was relatively high.
• Self-learning neural networks that can learn by itself on top of that big data, for answering certain problems not by people but inside of software.

KC: Is Integration important to being a Digital First Business?

HM: Yes – you see the problem is that when you build something new, outside of the scope of what you have integrated, you by definition have an integration problem. You created an integration problem. With the multiple new things happening in the public cloud, you either have an integration problem between old and new, or existing and new technology. You have to bring the two together. Or you might have problems with multiple clouds, which you have to link together because you have fragmented automation. This creates the need to have an integration tool.

The integration tool and process needs to be faster than the scope at which I’m building new systems, which is what creates integration problems. If your integration tool is not able to move fast enough, you can never catch up! If there’s innovation happening, then by definition you have an integration problem – and there should always be innovation happening.

The Integration and Automation Market’s role in Digital Transformation 

KC: Is Integration more important for one type of business than another for digital transformation?

HM: No – the integration problem happens the moment you have a new solution. That’s across all businesses. There is not a single business which does not operate something, somehow in the cloud. There might be different degrees of integration problems across industries but it’s a problem everyone has. This problem is not going away.

KC: The concept of Integration has been around for a long time now – a long time in technology years anyway! Do you think current integration and automation tools meet modern business’ needs?

HM: Many integration tools on the market are struggling with digital transformation themselves. For the most part, there are two sets of vendors: there are the traditional ones who offer to move things from on-premise to cloud and there are newer ones, which are called cloud native and have struggled to support integration on the on-premise side.

These two categories of players have not really fought for the same business. I think we’ll see much more competition on the integration side. The cloud based vendors realized they have to reach into the on-premise business and at the same time the on-premise vendors know that the cloud is going to happen so they’re moving offerings into the public cloud; So we’ll see much, much more competition, which is good because competition is good for customers.

Artificial Intelligence 

KC: As integration and automation capabilities become more and more advanced, there’s a lot of talk about Artificial Intelligence. What role do you see A.I. playing in the future of business and how we work?

HM: Artificial Intelligence changes everything pretty much – the only question is, “Do I have enough data that I can automate a problem reliably to a point that it is almost as good as the average professional on any given day?” The goal is not to beat the super talented professional on a very good day – that’s impossible – but rather to be the average employee and move the average for your enterprise up by suggestions, recommendations, and automations that are coming out of software.

There’s a lot of discussion around whether it is possible to create something that is better than your average employee. Personally, I’m very optimistic about this because so many things in business are handed down from management or the board, meaning they can’t be questioned, they just have to be done. So, in a business environment, A.I. can become a very good grader of if a decision is a great idea, an ok idea, or stupid idea that is coming from the top. The ultimate decision won’t come from software, but it gives the management a chance to revise it if it doesn’t make any sense. A.I. is a very good grader of projected action.

KC: What’s the most exciting trend you’ve seen this year?

HM: The rise of deep learning, self-learning neural networks – lots of clarity on the functions have been done and the things that can be automated. There’s no longer the need to look at UI and figure out, “yep that’s the system” there and saying, “oh in the US they call it zip code.” We don’t have to do that anymore. Why do this manually?

The big inhibitor to change is human and this would change the work life to be much more creative rather than doing clerical stuff by yourself. Think about email, nobody would let a machine take over but if they could do it just as well as you can on your average day, would you pay for that? I’d do it right away. And I don’t care what the neural network says as long as it’s good enough.

KC: How long do you think something like this will this take to become ubiquitous?

HM: It’s only a crosspoint. It depends on how cheap the company can develop it and how fast companies like Amazon, Google, and Microsoft Azure can make it happen. But there are many more companies and technologies that will come out and be key enablers, we just don’t know them yet. They have not yet been founded even. Right now they are just ideas, but they will get started, implemented, and grow to mega-scale fast – much faster than ever before. | END

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