The components of the digitalization

What are the components of digitalization?

First of all, digitalization is only possible with ‘the devices capable of managing digital signals’(1) (Verhulst, 451), and the established eco-system that connects all those devices to each other.
The information presented in code (digital signal) can be understood, transmitted and manipulated by almost any digital device, so in this case the method of storing the data in digital form is more universal. For example, ‘one system created for transportation digital signals may carry services that in the past were provided in separate ways’(2), as video, audio or text, for example (Pool, 23).

Thus, the first component of digitalization that ordinary people are dealing in their everyday life is a tangible object that people can own (rent) and/or interact with. It can be a mobile phone, smart watch or any kind of smart wear (sport bra, for example), laptop, cameras in the parking lot and any kind of sensors that ‘detects events or changes in the environment, and then provide a corresponding output.’ (3)

The second component of digitalization is a network that connects the great number of devices together. As we mentioned earlier, the digitalization is not possible without the established eco-system.

The third component that makes the digitalization possible is the cloud computing technology that is used for storing and managing the data that are produced by various digital devices and delivered to the cloud by the network.


Intelligent cloud platforms are the base for digitalization. It helps customers to manage their data with the support of integrated AI (artificial intelligence). The cloud enables the process of gathering the data and later on use this data for different purposes. Cloud computing is essential component of digitalization.

Below, I would like to list some terms that are often used while describing process of collecting, storing and managing the data.


The word ‘cloud’ is used as a metaphor for internet and network of computing equipment. The cloud can be private (only inside one organization), public (where anyone’s computer can be part of the cloud) as well as location or community based. Basically cloud is a network of computers that connected in order to work together with data, calculations and so on. Cloud is basically the metaphor for the internet. It is a ‘software, it is a platform, it is an infrastructure.’(4) It is a solution to connect everything together in order to develop a common sense out of the information.

Data center (Server rooms)

Data centers are usually the facilities that are used to host computers, storage systems, telecommunications, power supplies and various supporting devices that process tasks related to security and environmental control in the building. Data centers usually need a lot of energy to run and are in use 24/7.

‘Data centers are commonly run by large companies or government agencies. However, they are also increasingly used to provide a fast-growing cloud solution service for private and business applications.’(5)

 Big Data

This term used to describe a set (or sets) of information that are very big and complex, so it is very difficult to manage it. There are many concerns related to the capturing, managing, sharing, storing, transferring, manipulating, visualizing of the data as well as using private data for research and development of the services. The situation is becoming more complex as more and more digital devices (including smartphones and any kind of sensors) are collecting and transmitting their sets of data that are directly related to their owners and surroundings: those data sets grow very fast and the amount of it is increasing with a geometric progression. This inspired a great number of researchers and scientists in many fields to investigate the opportunities the Big Data is creating for our future as well as its obstacles and concerns of using it (especially privacy politics and law regulations) for developing products, services and various infrastructures.

Stakeholders of digitalization

While thinking about stakeholders that are part of the digital processes today, I came up with the conclusion that it would be beneficial to divide them into few groups. Those groups, depending on their position, are taking different roles in the digitalization in their relation with the data (create, gather, share, edit, process information). Furthermore, each of those stakeholders can have more than one role.
I would like to name those groups as: private users of mobile devices or a content creators (active users), distributors of the data and users of the final product or service, – pure consumers (passive users); business units who are creating new business models and values based on digitalization, i.e. using the digitalization as an advantage for developing the existing services and products they offer as well as creating new ones – value creators; service providers who are providing the service platforms that help to manage the data (like Microsoft Azure, for example:; legislation units, who are setting or documenting the rules, standards and norms for the digital environment and the other stakeholders; researchers and academia who are producing new insights on future possibility of digitalization, making assumptions and contribute to the theoretical framework. Finally, I would like to mention the society in a global and local context and its relation to the digitalization.
Digitalization creates new opportunities for technological progress in many different industries, the progressive digital technology is a definite competitive advantage for many countries and businesses. At the same time, with the opportunities and positive shift to the service economy, there are many issues with protecting the own technology, the network, its distributors and users from outside forces that could harm, mislead or use the data for their own interests.

Literature used for this article:

  1. Verhulst, S. (2002). About Scarcities and Intermediaries: the Regulatory Paradigm Shift of Digital Content Reviewed. In L. A. Lievrouw & S. Livingstone (Eds.), The Handbook of New Media (pp. 432–447). London: Sage Publications.
  2. Pool, I. de S. (1984). Technologies of Freedom. Harvard University Press.
  3. What is sensor? Wikipedia link: Cited 01.10.2016.
  4. Online article ‘What is a cloud computing?’ by Eric Griffith, 3 of May 2016, available online at:, cited 01.10.2016
  5. Article ‘How data centers work?’ by SAP datacenter. Available online at, cited 01.10.2016 


  1. Featured image has been taken from, 01.10.2016
  2. Cloud computing illustration is made by Sam Johnston. The picture is showing overview of cloud computing with typical types of applications.

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