Transformation from Traditional to Digital with Technology Companies
I personally witness that traditional companies want to create digital transformation stories by using technology effectively and efficiently, and I support them in their journey.
Of course, there are many factors and methods to get this job done right. Chief among these is the acquisition of technology companies by traditional players who are not technology companies.
That's why examples and stories of success in the world, especially for traditional companies in Turkey, are inspiring for us. In this article, I will tell you about Walmart, which is aggressively trying to implement technology transformation. Walmart acquired Polymorhp Labs, a cloud-based, self-service platform, last April. A purchase that matches exactly with the example I want to tell you about.
This technology company was founded in 2013. It created a turnover of 14 million dollars and reached 30 employees. It did this by making more than 500 million machine learning-based, revenue-oriented decisions in a day, reaching 2 billion unique users in more than 150 countries on a monthly basis, and the power to process 125TB of data.
Shareholders and potential investors, as well as Walmart, care so much about the company's integration with technology companies that it created $10 billion in market value growth in Dow in the first 5 trading days, with Walmart's announcement of the acquisition deal.
The interesting thing is that Walmart CEO Doug McMillion gave the first message for this type of acquisition in his presentation to investors 6 months ago. He mentioned that they plan to use the advertising industry much more effectively and that they want to integrate with this industry more seriously. McMillion believes that with this move, which it made its decision in April, it will strengthen its company with machine-oriented learning models in its pricing and commercial advertising strategies, it implements its vision of the company that focuses on innovation for its long-term strategy, and builds innovations at the company's center in an organic way.
The issue of buying technology companies was not limited to Walmart, only Polymorph Labs, it realized that it needed to transform itself into a technology company by incorporating technology companies such as jet.com, Flipkart, Spatialand.
For Walmart, which has 160 million online and store visitors every week, data collection has become a science rather than an operational process, and it tries not to be late to add the muscles it can use to its company by managing it in the most effective way. With the in-house ecosystem it has created, it will have the opportunity to both earn more income from its existing customers and seize opportunities to reach new customers.
As a result, traditional companies will continue their transformation journey. Each of them will make their own decisions and implement them. What is important here is that those in the top management of companies decide where and how to bring innovation, determine the areas that need to focus in technology investments, consider the details of joint venture structures or strategic partnerships with private companies, and follow the right methods at the point of purchases.
You can find my other article on this subject here.
References:
https://techcrunch.com/2019/04/11/walmart-acquires-ad-tech-startup-polymorph-labs-to-scale-up-its-ad-business/
https://www.crunchbase.com/search/acquisitions/field/organizations/num_acquisitions/walmart
https://www.nytimes.com/2017/01/02/business/dealbook/mergers.html