In this second part, I discuss the more thorny area of picking winners. Charlie draws on history to say that those who innovate don’t usually reap the rewards. And in this context, he quotes The Innovators Dilemma. (Coert Visser‘s analysis is particularly helpful to understanding the whole thesis of customers being in control.) But as all good investment advisors say: ‘History is no guide to future performance in the market.’
Innovation, by its nature is disruptive. It is disruptive innovation that has enabled the emergence of the Global Microbrand and the development of sophisticated conferences covering the whole area of social computing. It is at the edges of business communities that innovation is occurring. I don’t think for instance that Stormhoek or English Cut are marketing/advertising aberrations. I see these as examples of what could happen across a variety of industries. Such examples could for instance lead to the development of an entire segment of business we’ve not seen before. Those dependent on technology to frame their go to market strategies. It could certainly apply to the profession. Do these people really care who owns the technology? I don’t think so. Microsoft may be the most valuable brand on the planet, but is it unassailable? Not necessarily. It could still fail and end up in maintenance mode although I doubt I’d get many takers for a bet on that.
37Signals is certainly innovative. It’s flogged $120,000 worth of its Getting Real book with no middleman in 30 days at zero cost as the book is PDF only. But does it stay in its niche or does its foundation — Ruby On Rails – become mainstream and these guys become the next Google? Will Google in fact survive? Paul Strassmann questions Google’s likelihood of long term success. So maybe Charlie is correct.
But if enterprise buyers can see the value these kinds of innovation can bring. And can see what they might deliver to reach the valhalla of customer intimacy, then the customer really will have decided which it wants to succeed. And in the meantime, the market for many goods and services will have changed beyond recognition. It’s already happening in telecommunications. See the NTL/Virgin takeover?
Could Twinfield or Winweb seriously challenge Sage or will they get bought? (Please no speculation here – it’s a hypothesis building question.) Is Sage picking up lessons from what it sees as potentially its next big thing? It’s wiki approach to problem solving sounds pretty innovative to me. Accounting professionals want stability and reliability yet they cannot afford to avoid the wave of competition that arises out of the smart use of technology. Would they see one of the emerging SaaS players or social software as a risky investment. Apparently not.
Regardless of history, I see many possible outcomes. I certainly believe we’ll see a new breed of technology provider that will follow an assembly model for development which won’t be scary for buyers. It’s already being worked upon by some vendors I speak with but I’ve not seen a lot of evidence from resellers or consultants. Doesn’t mean to say it’s not happening. It will almost certainly allow professionals to clearly distinguish themselves by their use of available technology and not the technology itself.
Either way, the age of real customer power is here. Vendors ignore it at their peril.
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