As Vinnie puts it, “Big Tech is Broken – badly“.
And broken needs fixing, but is the patient ready for that? I wonder if the issue is a semantic issue; how the fix, the innovation, is understood. If you don’t get that right, well then, you’re off on the wrong foot. Or rather, you might be band-aiding a broken leg.
Lets have a closer look at the term “innovation”:
“Make changes in something established, esp. by introducing new methods, ideas, or products”
Chew on that for a second. Think Enterprise Software innovation and notice how easy it is to interpret it differently depending on where you hail from?
For the new chap on the block “something established” should mean the established ways of their potential customers. I.e. an opportunity to innovate on how the end user delivers value using IT.
The established folks (or the new with an “established” mindset) could easily think that “something established” means “established technology and products”. I.e. a need to enhance existing products without bothering the end user.
Both interpretations can arguably be useful for the end user. But only until a certain point, the latter, refining and making it easier to consume old technology, will have a rapidly diminishing value gain, in the end have no gain at all. What is the gain of upgrading from ERP x.1 to ERP x.2 these days? What about the amounts spent on UI experts and labs, does it feel like well spent (my) money?
The propensity to focus on bettering established products instead of challenging how things are done at the end user and do something innovative about that, is also influenced by a closeness to the market: End users are not often willing to change their ways until they have to, so when asked by the marketing people of the established vendors they tend to define their needs based on existing ways and products.
[See “The innovator’s dilemma” by Clayton M. Christensen for more on that.]
Hence the two general innovation strategies of the Enterprise Software industry:
1. Spray paint.
Upgrade old stuff, tweaking of anything in existence, tinkering with new features, UI work to make it look better, add more reports (say BI) – spray painting for short.
[Thanks again to Vinnie who coined the phrase “‘Spray Painters’ of the New Renaissance” on page 12 in his new (and great!) book “The New Polymath” (more about that in a later post).]
Spray painting has long been the daily “innovation” path for the established, but lately a new “innovation” option has emerged, both for the establishes and for many new vendors:
2. Fast food.
Take a cue from the restaurant business, make the product(s) easier to consume: On demand, in the cloud, cheaper, faster, simpler, SaaS – the fast food strategy.
SaaS with relish.
Sadly enough, easy scaling and the lure of easier consumption entices many a new entrant to act as if they were established, often with initial good results. But soon the fast food chains will be established and the consumers will wake up to their real need; deliver better value, not only engage in gluttonous, cheap and easy consumption of the old ancillary tools.
The dilemma for the new is often that their backers (see VCs) have a well established “truth” of “never try to change user behaviour”. A rather sensible attitude per se, but a disaster for real innovation if one wants something truly new and disruptive for the long run.
The dilemma for the established is the inevitable cannibalisation; if they were to innovate on the ways their customers delivers (IT supported) value it would question their existing products and threaten the cash flow.
Spray painting and fast food strategies makes much sense short term, but history has shown us time over and again that some will break the short term mould and one day make the others irrelevant. To get there one has to be truly brave and go beyond the obvious and visible. But alas, brave is not typical enterprisey 🙂