martes, 11 de agosto de 2015

#Alphabet : A vision of the future of the digital business

Google has taken by surprise the digital sector with the creation of Alphabet. The new company will be the umbrella organization for the business units for different sectors. The bold step of the internet giant is the recognition of the need of a different structure to be able to compete in a digital world. Internet is not any longer the only field for the development of the digital business. According with this view, we can interpretate the organisation of the company formerly known as Google as its vision of the future of the digital business. 

First of all, the new organisation reflects the thought that a company will survive in the digital world if it is organized and work as a startup. If you are too big to work as a startup, you have to divide the company and create new business units to take advantage of the growth opportunities in new sectors. Agility and flexibility are the two features that the organisation of a company should preserve to guarantee its sustainability and long-term profitability.

Secondly, there are a lot of buzzwords around the digital economy but underneath all the hypes few technologies are mature enough to be the core of businesses that will be profitable in the médium term. The organisation of Alphabet provide us its vision of which are these technologies and business. According with this vision, it is important to highlight that Alphabet has not decided to create a business unit for intelligent transport. Although the company has been heavily investing in droids and self-driving cars in the last two years, the company thinks that it is no time yet to reap the benefits. Quite a different case is the sector of Smart Homes, maintaining Nest as an independent unit heralds a fierce forthcoming competition in this área.

Thirdly, Google, the internet Unit of Alphabet, is seen as a monolithic business. There is not difference between mobile and fix accesos and in spite of some voices (specially in Europe) it doesn't exist any hint about a separation of the search business in an independent unit. Google will remain as a holistic internet platform. This decision could mean a defy to the EU antitrust case under investigation

Alphabet has made its move. Now is the turn of the rest. Once again, the company formerly known as Google is setting the pace. Whatever the strategy behind the new organisation, the result has been a 5% increase of the value of Google's share 


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