The DX Economy is Transforming Customer Relationships




Each year, IDC’s Directions conference serves as a coming together of industry leaders to chart the course for the year ahead in technology and innovation. At Directions 2017 in Boston, the theme was ‘The Dawn of the Digital Transformation Economy’. It became increasingly clear throughout the day that in today’s digital transformation economy, the nature of customer relationships is changing rapidly, and it’s all about data.

SVP and Chief Analyst Frank Gens began the morning keynote by asserting that we are “just at the beginning of a big flywheel of demand and innovation.” As the sessions continued, analysts frequently referenced the new formula for success in the digital economy: innovation = code + data.

This value equation extends well beyond the IT industry into all markets. As the means for collecting customer data through smart, connected products, product companion apps, cloud-based digital services, and big data analytics become ubiquitous, customers are getting savvy about the value of their data. In addition to their partners and suppliers, they are scrambling to extract its value.

In fact, IDC believes that by 2018 organizations across all industries will experience a 3x increase in the number of software developers they have on staff as they look to create value in new, digital ways. Customers are demanding a seat at the table in exchange for their data and are setting new expectations about the nature of their relationship with suppliers. Companies positioned to succeed are embracing this shift and welcoming customers into their ecosystem as partners.

In the past, products were sold as part of a transaction. Data was gathered at the point of purchase, and if you were lucky, success was measured by future purchases. This transactional relationship was predicated on each party creating value in isolation with manufacturers’ success built on volume of product sales and buyers’ on effective utilization of those products. Now, with digital systems connecting physical products and systems, the continuous exchange of data is shifting the nature of relationships. Success for all parties now relies on the co-creation of value and innovation.

Scott Lundstrom, GVP and GM at IDC, said in a session on the emergence of industry-focused cloud ecosystems that this shift in relationships “is the macro-economic inflection point we will all be discussing in a decade.” Complex ecosystems that span manufacturers and their customers are emerging, and technology partners are playing critical new roles in this ecosystem by helping to bridge the physical and digital worlds. But this co-creation of value is all about “connecting the dots,” as Gens characterized it, by taking information from the connected world and making sense of it to drive value back to customers – and it can’t be done alone.

Gens advised that “all IoT solutions are highly vertical-ized – if you’re in generic relationships, you better find industry-focused solution partners quick.” Technology partners matter now more than ever because they will supply the critical infrastructure that enables manufacturers and solution providers to develop these new relationships and make sense of the influx of customer data. Ecosystems are wider than in the past, and new and expanded partnerships represent the single greatest strategic choices enterprises are faced with today.


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