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CEO PERSPECTIVE: Defining tech’s many facets

February 11, 2017

ceo-langellier-mike.jpgIf you’ve been reading the Indianapolis Business Journal, you’ve likely found it hard to ignore the number of stories about Indiana’s rapidly growing technology industry. Interactive Intelligence sold for $1.4 billion late last year to Genesys, making it the largest tech-company acquisition since ExactTarget sold in 2013 for $2.5 billion to Salesforce.

Those are two of more than 20 tech community acquisitions or IPOs in the past decade totaling $6.5 billion in market value. In 2017, our state’s tallest building will have a tech-company logo on top—Salesforce. Additionally, more than half of new jobs announced by the Indiana Economic Development Corp. in the past two years have come from tech companies.

As technology permeates companies and industries, there is increasing talk that every company is becoming a tech company. So how are we to make sense of these blurring lines between businesses?

No framework is perfect, as many companies have products, services or lines of business that span multiple categories. That said, this framework should help, and it starts with two macro-level categories: tech companies and tech-enabled companies. Tech companies generally fit into one of three categories: tech product companies, tech service companies, or tech infrastructure companies.

Tech product companies sell a software or computer hardware product to the market. Examples include software companies like Salesforce, Genesys, MOBI, hc1.com, Healthx, T2 Systems, Google and Facebook; hardware companies like Intel and Cisco; and hybrids like Scale Computing and Apple.

Tech service companies provide their tech-skilled people’s time and expertise to customers, often helping non-tech companies develop a website (Generation Moonshot), develop a software product (Moser Consulting, Kinney Group, eimagine), implement a software system (Appirio), enable internet of things development (ClearObject), or manage tech infrastructure (Apparatus/Virtusa). I also include cybersecurity consultancies here (Rook Security, Pondurance).

The last category of tech companies—tech infrastructure companies—provide the telecom backbone for internet connectivity (AT&T, Comcast, Verizon) or data storage and hosting facilities (LightBound, Online Tech).

Check out the TechPoint.org Job Board and you will see that all the aforementioned companies need both tech-skilled and business-skilled workers. Tech-skilled workers include software engineers, database architects, network administrators and information security analysts, among others. In addition to our area colleges and universities, TechPoint’s Xtern program and Indy Tech Fellowship, as well as coding schools like Eleven Fifty Academy, supply such talent. Business-skilled workers are often in sales, marketing, project management, customer support, finance or human resources. Programs like TechPoint’s Sales Bootcamp and the Orr Fellowship supply talent in some of these categories.

What remains is a large category of tech-enabled businesses. NextGear Capital built a large software product and progressive tech team inside a massive auto finance company. Angie’s List is transforming into an e-commerce company. Eli Lilly and Co., Indiana University and Purdue University employ hundreds of tech-skilled workers. All of these organizations and most others in our economy are somewhere on the spectrum of tech-enabled organizations.

Tech-enabled companies’ use of technology can be as sophisticated as tech product, service or infrastructure companies. In the future, diabetes management, a core business for Eli Lilly and Co. and Roche Diagnostics, might include a device embedded in the body that senses blood sugar, dispenses micro-units of insulin, connects to a person’s phone, and maybe even notifies a doctor. Making that happen in a pharmaceutical or diagnostics company will require tech products, services, infrastructures and tech-skilled workers.

With sensors, software, data management and telecommunications, Cummins’ diesel engines and Rolls-Royce’s jet engines might in the future anticipate part failures before they happen, order a replacement, and create a service request. This, too, depends on tech products, service, infrastructure and tech-skilled workers to create the future of the internet of things.

Indiana has the opportunity to take a leadership role among Midwestern states and Indianapolis among midsize cities. To do so, we need to think bigger about Indiana’s future tech-enabled economy, dissolve traditional industry silos, and band together as players in a larger, broader tech ecosystem. We need to collectively attract talent, companies, capital, connections and other critical resources for growth. I have charged TechPoint with focusing on this mission in 2017 and I hope you will join us. Together, we can be so much more.•

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Langellier is president and CEO of TechPoint.

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Recent Articles by Mike Langellier / Special to IBJ

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