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“These companies have responded well in serving their customers,” said Aaron Levy, chief executive of Redwood City, Calif.-based Box. Inc.
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Meanwhile, many of those startups are now feeling the pressure around valuations and cash flow.
If many incumbents have managed to survive the digital disruption, they remain in the early stages of harnessing the capabilities of the cloud and artificial intelligence, said Mr. Levy, which will help reshape work and collaboration as one of the largest Let’s look at one of the effects.
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Mr. Levy sat down with Businesshala to share his thoughts. Here are edited highlights of the two conversations.
Businesshala: Who’s doing it right?
Mr. Levy: I actually think a large percentage of the Fortune 500 have done this well. In the Valley, we used to have a way of thinking about it, that a significant portion of the Fortune 500 changes every two decades due to disruption. And digitization was probably the biggest disruption that could change the leadership positions of these organizations. And yet I would argue that a large percentage of Fortune 500s responded well to that threat.
Mr. Levy: Silicon Valley is great at providing world-class digital experiences to consumers and then disrupting entire markets because of that. It ultimately comes down to whether you provide a better customer experience. What these incumbents were ultimately able to deliver was a better customer experience, even better than what it could disrupt because it could be cheaper and have better content attached to it. , irrespective of the specific industry.
Think about how most banks have actually gotten the message across on digitization and haven’t really been disrupted by a few fintech platforms. Fintech has actually filled more in the gaps in the ecosystem as opposed to completely changing its course. Look at media and entertainment. Netflix,
Great company, but Disney+ is doing incredibly well. Ford and GM have done incredibly well at this, as have electrification, and some of their digital platforms.
Also, insurance. Ten years ago I think the general belief in the Valley would have been that all these little insurance companies would disrupt the world’s state farms. And this is clearly not happening.
Businesshala: The Fortune 500 is holding its own. But what kind of innovation do you see emerging from Silicon Valley around enterprise technology?
Mr. Levy: It’s hard because I think some key words will sound similar and yet the effect will be different. If you think about the cloud of the last decade, it was largely about moving how we used to do things into more efficient delivery mechanisms. We are in the very early stages of saying, well, wait a second, with unlimited data, the full promise of AI, unlimited computation, fast networks, what if we could actually try and change the underlying process that we Trying to replicate In the Clouds?
Are you familiar with GitHub Copilot? Their AI engine lets you get type-ahead predictions for the code. Suddenly there’s a whole world’s code-base available for my code editor. It, in fact, fundamentally changes the nature of software development. Think about one that applies to every aspect of the business.
Businesshala: How do you measure up to this new way of doing things?
Mr. Levy: It is more qualitative and basic. Once the intelligence is baked into the product, it changes the water level of that entire area or place to the point where you can’t really quantify it because it’s just about everything you do at that point. gets baked in.
When you take it into everything in marketing, legal and human resources and finance it will start to change how things work. It’s still more than a decade’s worth of work for all of us to imagine getting there, but you can see the writing on the wall to see what it starts to look like.
Tom Loftus at [email protected]