Ask the IT Consultant

Jun 2 2009   11:54AM GMT

Looking for Business Innovation in all the Right Places

Beth Cohen Beth Cohen Profile: Beth Cohen

Question:  Where are the next major innovations in IT going to be coming from?  With the continued squeeze on businesses to run more efficiently, what do you see as the biggest market drivers?

Unless you have been buried under a rock for the past few years, the answer to this question should be obvious.  Practically all of the revolutionary products and hot services that everyone is talking about are being developed directly for the consumer sector.  Yes, business has been happy to cautiously adopt innovations; only after they have proven themselves in the brutal crucible of the fickle mass market.  Think about all the great new products that have come out in the last eight years, wireless LAN, Instant Messaging, Web 2.0, social networking, MP3 players, PDA technology, flash drives, and cloud computing, (yes even cloud computing, which is mostly a means for Google and Amazon to recoup some of their investment in excess capacity) are all examples of technologies that originated as products designed for the consumer market that have since been adopted by the enterprise.  The truth is that there has been essentially NO IT innovation created directly for the business market for many years.  Unless you count virtualization and mass storage hardware, which I would argue are mostly reinventions of the very old ideas of the service bureau and the mainframe respectively, on faster hardware.

Looking deeper into the economics of emerging technology, it becomes obvious why innovation is coming mostly from the consumer sector.  Follow the money.  While the risks for venturing into the consumer market are extremely high, — ask Apple about the notorious Newton, a product clearly far before its time.  The rewards for catching the fancy of the consumer cannot be matched by anything in the enterprise market.  Apple’s iPhone, a far more sophisticated Newton successor, is a good example.

My crystal ball says the next big thing will be developed for and marketed to consumers first.  Small and mid-sized business customers, for better or worse, are now lumped with consumers.  Since the fragmented and notoriously cheap SMB market has always been a hard nut to crack, it is easy to see why it makes logical sense for vendors to build consumer grade products and assume small companies are willing take whatever they are given.  With the current tight economic environment, permanent transfer of corporate R&D to the startup model, and limited resources available for innovation, I expect to see this trend not only continuing but accelerating for the foreseeable future.

Beth Cohen, Luth Computer Specialists, Inc.  IT infrastructure consulting services.

2  Comments on this Post

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  • Hmerkin
    While it is true that many of the revolutionary IT innovations have been geared toward the consumer market, there is still major growth potential on the enterprise side of the coin. You point out the continued pressure all companies are feeling in order to run more efficiently, which is going to be a continuing reality over the next several months. It is critical for an organization to leverage technological breakthroughs that allow for increased visibility and control into operations. Seeing this information in real time and allowing access to all knowledge workers dramatically cuts down on the use of valuable resources and prevents the enterprise from getting bogged down in its own IT.
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  • Halr9000
    Your comments are in agreement with my opinion. There is enormous opportunity for innovation on the business side of technology, but my point is that in this unstable economic climate, innovators, venture capitalists (who always want to hedge their bets) are gravitating to investing in technology that has a higher likelihood of acceptance. The consumer market with its profile of huge numbers of cheap widgit sales has more potential than the business market.
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