In thinking about my CEO memo for ThermoFisher Scientific, my mind keeps going back to the business shifts that have happened in both the financial industry and the retail industry where large amounts of processing capacity and bandwidth have dramatically altered the way that value propositions need to be made in those industries. The element that interests me the most is how the build up of processing power in the hands of Amazon led them to exploit cloud processing models, which was completely out of their original line of business, but has placed them at the forefront of an emerging new ecosystem of services.
In thinking about ThermoFisher, one of the worlds largest producers of scientific analysis equipment, I can't shake the thought that each one of these analysis assets (which is found in every biotech, pharmaceutical, hosipital, etc.) has a datasystem hooked up to it which in the past decade has been engineered to pool scientific data from multiple units for integrative analysis. If one follows the trends that we have discussed in this class to their logical conclusion, then a potential service must exist where a player could pool all of that scientific analysis together and run massive collective research functions at a cloud-based service structure and charge on a transaction basis, much in the same way Amazon is doing. This would allow for smaller laboratories to access massive amounts of research without making a huge investment in processing power (a business that ThermoFisher does not get anyway since they do not make computers) and also allow larger businesses to save money by being able to divest their server farms. This would also provide massive postive feedback effects to Thermo, since they would be able to get real-time live analysis of what kind of research is being done and therefore be able to invest their R&D dollars in the proper place (much like GE and the smart jet engines).
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Great line of thinking. So, either Thermo creates it or someone from outside the industry will enter to provide that service. We saw that with Amazon.. acting as the channel for those that either did not have the competence to set the channels up or were not as good as Amazon. Data collection, aggregation and analysis is becoming more important as we go to an economy based on knowledge and insights. So, this is a key trigger for transformation. Motivate the burning platform and sketch out a way for Thermo to embark on the trajectory that you lay out. Show what may happen with just staying put or staying the current course.
ReplyDeleteThank you for the focus on displaying both scenarios. This matches what we have discussed earlier about evaluating strategic options like financial options by determining the "cone" of possibilities. This will provide an excellent framework for the memo, by demonstrating where the market will go with the initiative and where it will go without it. This will obviously have a focus on the eventual position of Thermo, but seeing the market value overall helps to give one the idea of how much total value there will be and therefore provide that ever important total size of potential marketplace number.
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