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Are you ready for the Brandpocalypse?

Deloitte on Cloud Blog

Smaller companies were once no threat to the big guys. Then cloud computing allowed small companies to punch way above their weight class by leveraging technology to disrupt an existing market.

November 29, 2018

A blog post by David Linthicum, managing director, chief cloud strategy officer, Deloitte Consulting LLP

It’s 2023, and yet another 100 plus year-old company has sold to one of the many holding companies that collects and combines “classic brands” such as major car builders, food service companies, and many retailers. Basically, the buy-outs remove many household brands from the market that were once a common fixture of American life.

So, what happened? Innovation and the rise of technology. Smaller companies were once no threat to the big guys. Then cloud computing allowed small companies to punch way above their weight class by leveraging technology to disrupt an existing market.

The primary examples are already well-known: disruption to taxi services, cable TV, hotel chains, and brick-and-mortar retail. However, you don’t hear about smaller disrupters that enter insurance, banking, logistics, tech, healthcare, and manufacturing verticals, with sites that take market share away from the big brands that have been around for 100 years or more.

Today, most of the big brands don’t even see this coming. Or, if they do, they don’t understand what they can do to disrupt the disrupters. The red flags are popping up right now. Lower than expected revenue growth, lower stock prices, and investors who want to understand how the big brands plan to change around a rapidly changing market.

Eventually, and potentially, many of the larger brands that have been around for decades may simply no longer exist. They could be forced by investors to sell to competitors, or, in many cases, to holding companies that specialize in parting out traditional companies that just could not keep up with the times. Disruptive innovation will spell The End for many major brands, a.k.a., the Brandpocalypse.

What can traditional companies do to avoid being driven out of the market? In a word, change.

Organizations are going through this disruption due to the availability of technology that is both cheap and effective. Driven by the cloud computing movement over the last 10 years, there are few to no barriers to smaller and more innovative businesses to get systems in place, experiment, and find new ways to do old things.

Most traditional businesses have a slight presence in the cloud, and many will take years to migrate systems to public cloud computing providers. However, even if they could move much faster, they still have a traditional culture to contend with that is often not willing or ready to leverage new approaches and technology. That’s even more good news for those looking to disrupt their primary market.

So, the only way to avoid the upcoming Brandpocalypse is to have the courage to change. Change the culture, change the use of technology, change the technology, and look at trends such as cloud computing as a force multiplier for the business, and not another technology distraction that must be dealt with.

The true issue is that most traditional companies won’t ‘get’ this shift, or, if they do, they won’t be able to change in time. However, a few will see the writing on the wall and change accordingly. Perhaps those are the brands that should continue to receive our loyalty.

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