Steve Case is Right About the Third Wave and the Blockchain and IOT Proves It
Steve Case’s The Third Wave is a fascinating book that outlines a playbook for companies building the next generation of technology solutions. In the book, Case argues that we are entering the “Third Wave” of the internet. While the first wave focused on connecting customers to the internet and the second wave on building internet services on top of that infrastructure, the third wave will leverage technology to transform major industries such as transportation, healthcare of education.
Part of what makes Case’ third wave theory fascinating is that it highlights the importance of often ignored aspects such as partnerships, government or understanding of the regulatory environment as fundamental elements to be successful with the next generation of technology companies. Even though the book focuses on industry specific solutions, horizontal technology movements like the blockchain and the internet of things (IOT) are clear examples of third wave technology movements.
The Third Wave and IOT
IOT, in and out itself, has been often called the third wave of the internet. While the IOT space has seen an explosion in the number of startups providing hardware, software and solutions for vertical industries, the market has been dominated by incumbents such as GE, Microsoft, IBM or Amazon. These incumbents have reacted effectively to the change driven by the IOT movement and released very innovative technology offerings in the space but you can argue that their initial success has been based on their ability to execute the third wave playbook.
A significant part of the adoption of IOT technologies has come from solutions in the industrial sector or in regulated industries such as healthcare or insurance. In those environments, the ability of companies like GE, Microsoft, IBM or Amazon to establish the right partnerships, address the compliance and regulatory requirements and establish strong strategic alliances have been key to their success in those markets compared to, arguably, more innovative startups.
The Third Wave and the Blockchain
The blockchain is another example of a third wave technology movement. At the recent Code Conference, IBM’s CEO Gini Rometty referred to the massive opportunities in blockchain technologies often comparing it to IBM’s work in the cognitive computing space in which technologies like Watson are redefining entire industries.
Interestingly enough, most of the lead blockchain platforms in the market is being produced by startups and not bug enterprise software companies. However, following the third wave’s principles, companies like IBM and Microsoft have enabled blockchain technologies as part of their cloud offerings starting the “blockchain as a service” (BaaS) trend. Additionally, both IBM and Microsoft have developed impressive partner ecosystems around their BaaS offerings and are starting to see adoption within regulated industries like legal or finance.
The blockchain and IOT are some of the most notable examples of third wave technology movements. In other to be successful in those markets, startups will have to develop effective partnerships and understand the regulatory environment in specific industries. Disruption in those markets is likely to be more challenging than the second wave technologies but the impact can be also be much more profound and relevant.