The secret sauce that enables the world’s most innovative companies to stay ahead

May 19, 2022

Tobi Knaup


The Rise of Smart Cloud Native Apps | D2iQ

6 min read

To learn how D2iQ can help your organization attain the benefits of a smart cloud-native platform, contact the experts at D2iQ.
In August 2011, Marc Andreessen wrote an article in The Wall Street Journal entitled “Why Software Is Eating the World.”

Andreessen predicted that the leading companies in any industry would be software companies. And indeed, a wave of online software companies arose in which Netflix ate Blockbuster, Apple and Spotify ate Tower Records and the CD, and LinkedIn disrupted the recruiting industry. Amazon not only ate Borders and Barnes & Noble, but as CB Insights reported, “Amazon’s e-commerce dominance paved a path of destruction through books, music, toys, sports, and a range of other retail verticals.”

Everyone is familiar with the apps we run on our smartphones to use these software services, but there’s another type of software that makes these products work: They are the apps that run behind the scenes, in the cloud, always available and dynamically managed by a platform so they can scale and be updated daily to keep up with the growth these companies are experiencing. These types of applications are called cloud-native apps.

The disruptive wave of online software companies weren’t just ahead of their competitors with innovative product visions. They also knew how to architect the cloud-native apps that are required to seamlessly deliver their services to millions of customers, along with a cloud-native platform that gave them new levels of agility and enabled them to update the apps multiple times per day. This was no small feat, and contributed significantly to the massive competitive advantage these companies were able to enjoy.

The Flywheel Effect

In business, the flywheel effect occurs when accumulated wins for a company create so much momentum that growth becomes unstoppable. By leveraging the reach and agility of cloud-native to create compelling customer experiences, each of the disruptive software companies became an innovation flywheel that was hard to catch up with once it was set in motion.

Today, the companies building the most disruptive products are leveraging another advanced technology to their advantage–artificial intelligence (AI), along with one of its main branches, machine learning. AI already surrounds us, often without the average user realizing it.

On the iPhone alone, for example, the autocorrect feature, Siri voice assistant, smart photo albums, face recognition, and search capability are all powered by AI. Similar examples of AI-infused apps exist across all industries.

Smart Cloud-Native Apps

Just like the Internet and cloud technology that gave rise to Netflix, Spotify, LinkedIn, and Amazon, many of the AI-powered products depend on applications running in the cloud to make them work. We call them smart cloud-native apps.

Smart cloud-native apps have AI at their core, are continuously deployed, and are dynamically managed by a smart cloud-native platform. Like the original cloud-native apps, smart cloud-native apps enable flywheel innovation because they can be updated constantly and they often have a built-in feedback loop that enables them to become exponentially better. A smart cloud-native platform is not just a platform for running smart cloud-native apps, but like the apps running on top of it, the platform itself leverages AI to improve operations.

Tesla’s Virtuous AI Circle

A good example of a company harnessing the power of AI to its advantage is Tesla, arguably the most innovative car company today. Tesla describes itself as an AI-first company, and the company’s AI-powered cars constantly gain new capabilities through automated software updates.

As a Tesla owner, I can attest that their cars are not self-driving today, but Tesla is doing something that to my knowledge no other mainstream car manufacturer is doing: They are very quickly obtaining new data sets from their fleet of customer-owned vehicles to continually use the data to make their AI better.

Say, for example, Tesla wants to improve the way AI behaves at stop signs. They can simply send a command to the fleet to send back video feeds whenever one of their cars encounters a stop sign, and within a few days they can start working on a new training data set, roll it out in the next over-the-air software update, and move on to the next problem.

This quick iteration creates a positive feedback loop of product improvements that is hard to catch up with once it goes through a couple of cycles. It will enable Tesla to remain years ahead of its competitors.

AI Makes Automotive Waves

Although fully safe and reliable self-driving cars are yet to be perfected, the AI-based computer vision on which self-driving cars rely has made great strides. As Vox notes, “AI used to have a hard time identifying dogs in pictures; now that’s a trivial task.”

Even though self-driving consumer cars are late in coming, the accelerated maturation of AI has given rise to other types of autonomous vehicles, including the robotaxis that threaten to disrupt the taxi industry. The seeds of this disruption have been planted in the driverless robotaxi services launched by GM-Cruise, Google-Waymo, Ford-Lyft, and Intel-Mobileye in San Francisco, Phoenix, Miami, and Germany, respectively.

AI Pervades

While the auto industry is proving to be fertile ground for a range of AI applications, it is but one segment of an enormous spectrum of AI use cases being spun out. In the healthcare industry, for example, AI is being used to enhance diagnostic systems, drug development, personalized healthcare planning, predictive medicine, robotic surgery, automation of repetitive administration processes, medical imaging, and more.

We at D2iQ are helping to push the envelope by working with customers in the automotive, healthcare, hospitality, manufacturing, transportation, and government sectors to develop AI, IoT, and edge-of-network solutions.

AI Eats the World

In all these use cases, the AI products that are emerging are in many ways vastly superior to their non-AI competition. I believe that these digital experiences that are powered by AI and are self-improving will be the defining attributes of the next generation of winning products in all industries.

This is the power of smart cloud-native apps, and why businesses must act now if they want to compete. Because in every industry there are one or more Teslas who are leveraging smart cloud-native technology and building flywheels today. Once again we are in the throes of a software revolution, and in this wave AI is eating the world.

To learn how D2iQ can help your organization attain the benefits of a smart cloud-native platform,
contact the experts at D2iQ.

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