TORONTO – Railroads may be one of the best examples of a traditional industry that could get lost or displaced in the digital transformation journey of business. The railroad industry was at one time a business changing technology that revolutionized transportation. Bryan Che, general manager of cloud product strategy at Red Hat, told attendees at the Red Hat Conference that railroads connected the world through steam-power locomotives and it’s still operational today.
But in this new world of the Uberization of business even traditional modes of transportation such as a railway or legacy industries need to digitize. “Digital transformation will impact all industries,” Che said.
He added that there are two questions each industry must consider in terms of going digital.
- What does it look like in a traditional industry?
- What can you do to practically make it happen?
“What is the new value being created digitally? Business is shifting from goods and services to digital services and interactions. Large industries are transforming to better engage with customers digitally,” Che said.
Examples of this are much talked about already such as Uber, Facebook, Alibaba and Airbnb. However, Che provided parallels between the four organizations. They are:
- All four are digital native companies;
- Each has taken the lead from a traditional industry leader; and
- They all do not own anything.
“Uber does not own any cars. Facebook is the largest media company and they do not own any media properties. Alibaba does not have any retail inventory. Airbnb does not own any rooms they rent.”
Che suggested mobility, Internet of Things (IoT), and cloud are three areas for business to create this digital value.
Mobile devices can build-out the digital strategy and implementation that delivers new digital experiences as the primary mode of interface.
IoT is how an analog business connects to the new digital world.
Cloud computing will run the digital business.
In all three areas open source is the programming for the digital transformation. Che admitted that many times open source is not used intentionally. Today’s reality is that in all three areas open source leads. “Open source usage has increased so it’s now best to make it strategic in your business transformation plan,” Che said.
For example, in the mobile space there is 63 per cent worker productivity increase, 19 per cent increase in services revenue, 50 per cent increase in customer satisfaction and a 13 per cent increase in new sales revenue. At the same time, open source has also decreased paperwork by 63 per cent for those in their digital transformation journey and reduced travel time by 31 per cent.
Boston-area healthcare provider Bay State Health is digitizing by putting patient history with treatment options on mobile phones. This enacts more interactivity between the patient and the doctor or other healthcare providers.
Bay State has also developed Snap Chat-like digital service that enables potential patients to engage with a healthcare professional via video with a built-in remote diagnostic solution.
“So if you are sick and its nighttime and you are not sure if you should go to the ER (emergency room) you can instead do a face-to-face consultation,” Che said.
McKinsey Consulting has determined that the population of devices has overtaken the number of humans in the world. These devices are connected to the Web and provides the opportunity for new digital services; some in machine-to-machine and is transforming world economies.
By 2015 McKinsey predicts IoT will be an $11.1 trillion market. That’s two times the size of China’s economy, Che said.
Going back to the opening railroad example.
After a tragic train collision, the U.S. government passed new legislation for train control that mandates all trains that are travelling too fast into a station or towards another train get a remote signal that stops the train immediately.
MeteorComm, a wireless communications solution provider in Renton, Wash., built the Interoperable Train Control Network (ITCnet) platform on open source running Red Hat’s OS including middleware for mesh networking to relay mission-critical data between mobile and fixed assets across the country’s rail system that includes remote kill signal.
Che said that MeteorComm is able to provide 99.999 SLA across the software stack because it knows it’s dealing with life-and-death situations. “Traditional industries like Railroads can go from analog to digital and IoT can transform everything we do.”
The final piece is cloud and OpenStack is the foundation for the cloud, Che said.
Most have IaaS and while it is foundational for business it can’t stop there. “Where you need to be with cloud is on next-generational services. Cloud needs an app layer with containers because those will build the micro-services and orchestrate the overall workloads,” he added.
