Seven billion connected devices and counting—and we are only at the threshold of the massive, new class of connected devices known as the Internet of Things (IoT).

Devices, such as sensors, remote robots and everyday objects, are rapidly becoming connected to expand the universe of IoT and to provide valuable data. In a network-centric world, the more devices that are connected in aggregate, the more value is created for the whole. And this value scales exponentially. It’s what’s called a network effect, and it can bring boundless possibilities for value and wealth creation in the next five years.

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It’s a great time to be in networking. Anytime we connect an object or an experience to the network, we change its nature and increase its value. The network effect of connecting more and more things in more ways is driving exponential benefit to the pioneers who are imagining the many new possibilities. The voice-controlled home assistant, connected car, connected spare bedroom and other innovations are early examples that we already take for granted.

The age of the network is here. This means the network gets built into every product and service, and that requires the network to be everywhere and you can connect to it all the time. Mobile has gotten pretty darn good in recent years. Unless, of course, you’re on a certain floor or in a certain area of a large building. Dead zones still occur regularly behind commercial-grade walls and energy-efficient windows.

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I’m a life-long Trekkie, and one of the many great things about Star Trek is that the characters always face a big, nearly insurmountable challenge—and, of course, the heroes win in the end.

If your organization is like many I see, the new year is ushering in a renewed urgency to embrace the possibilities of digital transformation. It probably feels like a big, perhaps insurmountable, challenge. Whether your organization is leading or being pushed into digital business, the cloud and the network are critical components in this business transformation.

+ Also on Network World: More proof the cloud is winning big +

As I shared in this blog, while moving applications to the cloud can be a helpful step in evolving IT, that by itself is not digital transformation. These apps running on your private cloud or in a public cloud service are important to running your business; however, most are likely not the source of your competitive advantage. Digital transformation is about accelerating the creation of new value for your customers and, most powerfully, helping your customers and partners create value for one another. But rest assured, the cloud and the network both play an important role.

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With the U.S. Presidential election over, there is now talk about infrastructure investment, and by that, most people mean roads and bridges.

But not so fast. The most important infrastructure of a modern economy or a modern business is the digital infrastructure. And it’s in worse shape than our roads and bridges. Most of today’s networks were put in place 20 years ago, well before the debilitating forces of cloud, big data, social, mobile computing, and most recently the Internet of Things (IoT) eroded their effectiveness and caused data traffic congestion.

+ Also on Network World: Digital transformation: Not your grandfather’s bank +

Sure, these networks still work—they still chug along, even if they’re slower and more vulnerable than we’d like. And let’s face it; it’s human nature to take an "if it ain’t broke, don’t fix it" approach. But that approach didn’t work in the 1990s for the brick-and-mortar businesses as the internet era emerged, and it won’t work today for any company that needs to digitally transform and do business in the network age.

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There is a fundamental differentiator between companies that are winning the digitization race and transforming industry segments and those that have traditional business models.

I’m talking about companies like Airbnb, Uber, Facebook or Amazon. Those companies don’t just create stuff for their customers, their customers create stuff for them, and for each other. The value of their product or service, therefore, is co-created by the people who use it.

+ Also on Network World: Is your network a platform for business innovation and growth? +

Facebook is the most obvious example of this. We are the product. Facebook just provides a platform. Its customers create all of the content and thus create the reason to engage as well as the value of the platform. Without us, there is no reason to be on Facebook.

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In a previous series of blogs, I talked about why your network is the critical foundation of the digital transformation and of the business benefits of moving to a new IP network architecture. I talked about how networks help you control time, how the effects of Metcalfe’s and Reed’s Laws result in wealth creation, and why there is such a tension between your dumb pipes and your smart business. But it’s not just the technology that matters in this coming digital transformation; it’s also your skills and ultimately your career.

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In his book The Seventh Sense, Joshua Cooper Ramo makes the thought-provoking statement that networks compress time. Nowhere is this more visible than with Amazon. Amazon reportedly releases more than 20,000 new features, capabilities and services to their customers a day, making changes to production every 11 seconds. Facebook does multiple releases a day, and Google does a large package of releases every week or two.

The tremendous power of the time advantage

These companies have created a huge advantage—a time advantage—and they use it with often-devastating effect to innovate faster than their competitors. And not just a little bit faster, not just twice as fast, or 10 times as fast, but orders of magnitude faster. This means faster to customer services, faster to customer value, faster to revenues and profits, even faster to failure. In business, controlling time is like controlling the air space in a war where everyone else is fighting from the ground. It’s a big advantage, and it’s delivered through the network.

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