[MUSIC] There is no greater danger for an organization than to keep the technology it has always used to refine and perfect what it has always done, instead of letting it go and moving on to the next technology platform. This is commonly referred to as the "burning platform" effect and requires organizations to take a leap of faith and jump from one paradigm to the next, time and again. Let's illustrate this effect and the consequences of jumping from the burning platform or not with two concrete examples. The first of a company which does it perfectly and then of another which doesn't. Our first example is Nintendo. Nintendo has been creating games since 1889. They started with traditional Japanese playing cards called hanufada, made possible by the printing press. From there they have consistently used technology from each era to transform their business and become a success symbol of early gaming platforms, such as gaming consoles and mobile gaming devices. Yet they didn't dwell on these successes, and instead revolutionized mobile gaming with Pokemon Go before launching their first cloud console with the Switch in 2017. They are a fantastic example of an organization jumping from one burning platform to the next for more than a century and consistently expanding their market along the way when most of their competitors were going out of business. So what makes Nintendo successful at this? The answer is that they are proud of "why" they exist, not "how" they operate. They want to make people play and any new technology is a resource to them. If they had cared instead about liquid crystal displays, and only this way to deliver gaming, every new technology would have been a threat to them. They would have disappeared with the last liquid crystal mobile console. A look at encyclopedias is a good way to demonstrate the difference. Companies that sold encyclopedias all focused on how to print and sell a very specific set of books, and this was what they were proud of. These beautiful leather covered volumes lined up on the shelves of the finest libraries and the happy few scholars who could afford them. For this they needed printing machines, dry warehouses, bookshelf makers, a way to ship and receive heavy containers, and a good door-to-door selling mechanism. They became obsessed with the books and lost sight of their initial mission: to capture and share human knowledge by any means. And then, unfortunately, every new technology became a threat to them, starting with the CD-ROMs. Quite amazingly, all the CD-ROM based encyclopedia providers made the exact same mistake and were later driven out of business by cloud native applications, such as Wikipedia. Nintendo and encyclopedias were both born from the printing era, with traditional playing cards and traditional books. Yet, they didn't react to their burning platform the same way, and have had very different outcomes in the past decades. Many other traditional industries have been disrupted in similar ways- the movie rental industry, for example, with on-demand streaming services, or chemical film manufacturers with LCD sensors and the smartphone revolution. Any business leader who considers cloud technology as not relevant to them or even worse-as a threat to the way they've always done business- faces the risk of a fate similar to that of the encyclopedia companies, vanishing into irrelevance and causing along the way massive damage to their workforce and their network of industrial partners. The good news is the cloud is still very new for many businesses. Wherever you are with cloud technology, there is still time to catch up, but now is the time to do it. Now is the time to ask yourself should I focus on how I do something and continue to improve it to the edge of perfection? Or should I focus on why I do it, capture the potential of a new platform, and revolutionize my own industry?
