Question: The venture investment community seems to be only interested in sure bets based on proven technology. Is innovation really dead?
Unlike what happened in the aftermath of the dotcom bust in 2002-2005 where there was tremendous investment and development of new technology from the entrepreneurial community, this downturn has not been as technologically fruitful. For the last year or so, the IT market has been coasting on previous technology breakthroughs for systems and storage virtualization, WAN optimization, wireless networking and the increased availability of SaaS (Software as a Service) offerings of all stripes. Those technologies are all innovations that came out of the telecom and technology downturn in 2001 that followed the dotcom boom of the late 1990’s. In the early parts of this decade, underemployed startup engineers were taking the half baked ideas from the dotcom era and turning them into practical products. The translation of the ASP (Application Service Provider) concept to SaaS is the perfect example of this process. Sadly, with the major innovations in these areas behind us, most of the recent product offerings are focused on incremental improvements rather than technologies that turn the status quo on its head.
Is there any hope that the growth of innovation will pick up again soon? I hope so, but the reasons for the slowdown are not for lack of new ideas. The meltdown of the financial markets a year ago which has meant reduced access to capital for new enterprises has in the short-term translated into entrepreneurs focusing on more potentially lucrative markets such as the growing medical and consumer areas. This does not mean to say that there has been no innovation at all, but from what I have seen the smart engineers are not spending much time devoted to developing the next killer business application. Why should they when the enterprise isn’t particularly inclined to be buying these days?
So what are the newly underemployed engineers working on these days? There is no doubt that smarter mobile devices are the next big thing. The level of innovation in this area matches the heady days of the early Internet gold rush. It seems like every other day there is an announcement of a new device, new application or a new service available to capitalize on the seemly insatiable market for pocket sized mobile systems that do more. Mobile email, texting, twittering and other rapid communication delivery systems are becoming the norm outside of the business community and are poised to sweep through the enterprise as well. The continued development of smaller or pocket devices that do more on a smaller footprint is ultimately going to transform business, but while many companies have not gotten much past Blackberries for their executives and road warriors, the new generation is using them for everything from romance to job hunting.
About the Author
Beth Cohen, Luth Computer Specialists, Inc.