Tom Siebel: CEOs Must Take the Tech Reins
February 09, 2018
Case categories include: Leadership Technology Trends
When one of the most successful tech leaders of all time says CEOs should personally drive decisions about technology, it’s probably a good idea to listen.
But there could be an even better reason. If you don’t, your organization may not have long to live.
“Most CEOs have no idea how massively disruptive the coming digital transformation will be or how quickly it will happen,” said Tom Siebel, a Silicon Valley legend and current Chairman & CEO of C3 IoT. “My message to them: whatever you think you’re doing, it’s not enough.”
In an exclusive interview with the Alliance of Chief Executives, Siebel says a major “extinction event” is under way in the form of a multi-layered digital transformation that will crush organizations that aren’t prepared to survive. The technologies driving this transformation include cloud computing, big data, social media, artificial intelligence (AI) and the Internet of Things (IoT). And every CEO should understand them all.
That’s because the coming digital transformation—being led by companies like Amazon, Uber and Facebook—could quickly kill off any company, even one as large as Wal-Mart. Amazon, for example, already owns 34% of the online U.S. retail market and is expected to own half by the year 2021. “There’s some question whether IBM will survive,” Siebel said. “They missed the cloud—and that’s a pretty big miss if you’re in the IT business, because that’s where everything is going.”
If anyone can see what technology has in store, it may be Siebel, who has been one of Silicon Valley's brightest and most successful entrepreneurs for more than four decades. Siebel was the co-founder and former CEO of Siebel Systems, which captured nearly half of the CRM software market before being acquired by Oracle for $5.8 billion. In addition to his role at C3 IoT, Siebel is chairman of First Virtual Group, a diversified holding company with interests in investment management, commercial real estate, agribusiness and philanthropy.
In a recent McKinsey Quarterly article, Siebel compared the current digital transformation to the discovery of fire and the printing press. When innovations like these occur, societies are massively disrupted over a period before they reach a new normal.
Siebel says a mass extinction in the business world has already begun. He notes that since 2000, more than half of Fortune 500 companies have either been swallowed by other organizations or gone bankrupt, as a new “species” of businesses is taking their place. Today’s digital transformation, he says, will affect every industry on a massive scale—even to the nation’s power grid, which is quickly being connected and controlled remotely in real time with the aid of AI.
When Siebel first made his mark in the business world, CEOs could afford to rely on IT experts on the executive team to help them make decisions about technology. But those days are over.
But if today’s CEOs must take the tech reins, where do they begin?
Siebel says cloud computing should be a CEO’s top priority. “The cost of computing and data storage will keep falling because of massive providers like Microsoft and AWS that provide this capacity at almost no cost,” he said. “A lot of small to medium sized companies are running IBM AS400s, with various software for accounting, ERP, shipping and manufacturing. All of that is obsolete because everything is now in the cloud.”
Next, CEOs should “embrace new branding and customer acquisition technologies” such as search engine optimization, social media outlets like Instagram and Twitter and the blogosphere. “These trends are being led by an entirely different culture – Millennials – who think, behave and purchase things differently than previous generations because they are motivated by different things,” he said.
Siebel said CEOs need to figure these technologies out and become personally familiar with them, not delegate them to a CTO or CIO. They need to comprehend and be able to make decisions about software as a service (SaaS), big data, artificial intelligence – which is about predictive analytics – and the Internet of Things. Siebel calls these technologies the “stack” that is currently replacing traditional forms of computing, even personal computers.
Lastly, Siebel says Bay Area companies shouldn’t make the mistake of assuming they have a leg up in the digital race just because of their location.
“This is a global phenomenon being embraced hugely in China, Europe and across North America,” he said. “You may know a lot of suppliers in the Bay Area, but that doesn’t mean you have an edge when it comes to survival. But for those who figure out how to take advantage of digital transformation, there lies a huge opportunity.”