This week we talk with top-ranking executive, Merv Adrian, Senior Vice-President of Forrester Research. On Monday we began the interview, and profiled Merv’s rich and long history in the industry. Today I put this question to Merv:
SI: What are the five biggest issues facing the business technology industry in 2006, and in 2007? How can they be solved?
MA: This is an interesting question, no matter who you ask. These responses are mine, not official Forrester positions – we have not published a ranked list of the most important issues. In no particular order:
ISSUE 1: Effective innovation with minimal disruption of existing business. This is a perennial dilemma. Invention is not innovation – innovation occurs when invention changes the way we live or work. But once a high-tech company experiences some success, maintaining its position becomes a tightrope walk – you need to support your installed base and still continue to innovate. How to balance those vectors is an eternal problem – look at the time it takes Microsoft to put out a new operating system, or Intel its next chip generation, as examples. They are always carrying their legacy along for the ride, and it slows them down.
Solution: To the degree we have a solution at all, it exists in building what Forrester’s Navi Radjou has labeled the Innovation Network. I’m leaving most of the richness out of his model, but the essence is that stakeholders are all involved, (including your customers, suppliers, financiers, brokers, etc.), in the process. This acts in part as a guide to keep you on the rails – if something is too far off the mark, you’re likely to know it. And if something truly disruptive comes along but clearly meets the needs of this wider network, you can be bold with some confidence. And then separately, you have to solve the problem of how to bring everyone along and support them effectively through the transition.
ISSUE 2: Economic uncertainty – where will the next tranche of revenue come from for high-tech?
Solution: Incremental growth will continue to occur in the enterprise business market, but that is what it is likely to be for some time – incremental. We have penetrated the enterprise market with today’s technologies and until a truly new thing comes along, the model will not shift dramatically. We are “doing verticals” already, and technologically in most spaces the big directions are the same – there’s no radically different technologies competing. The next large piece will come from SMBs and new geographies. Neither of those markets will be amenable to a direct sales model for most business technology – it will be about channels. The battleground for the reset of this decade for the biggest suppliers will be in building the biggest and best partner ecosystem. Good technology is table stakes. For the smaller companies, it will be about using the Net creatively to compensate for not having the channel organization, and about partnering carefully with the big players where it makes sense to.
ISSUE 3: People. The loss of experience.
We’re about to lose a generation of people who know how our systems work. And the shortage of new people – we can’t seem to graduate engineers fast enough, and in the US, for example we can’t get enough visas for those who want to come in. And some bright people are concerned about whether they can make money from their own IP in this industry without an army of lawyers.
Solution: I have to get on a soapbox here for a minute; our industry must be involved in policy decisions about these things. From retirement to education to immigration to whether IP law will support people who want to create new things, we are surrounded by legal, political and governmental issues and only a few companies know what to do about it. If there is a solution, it lies in the traditional path of getting involved with trade associations – in the US, the ITAA is a good example – and making our voices, as an industry, heard. The technology industry needs to engage.
And there are some technology solutions– eLearning has enormous intellectual and economic promise, for example. And knowledge capture, expertise location, the use of social computing techniques like wikis, blog crawling – all these things play a role too.
ISSUE 4: New economic and licensing models – software as a service, open source, value-based pricing, etc.
Solution: This is an uncertainty for any individual company, but it’s healthy for the industry as a whole. There is a new IT ecosystem emerging that will create a new model of pricing, licensing and payment mechanisms. Its shape is uncertain, but the best guidance for most companies is to watch closely and listen to the customer’s needs. Forrester spends a lot of time tracking how companies want to buy, and they are as uncertain as the suppliers are. But one thing remains clear – if the offering has demonstrable value and the price is fair and in keeping with that value, we’ll find a way.
ISSUE 5: Technology change. Everywhere we look – chip architecture, communications protocols, software architecture – everything seems to be undergoing wrenching redefinition. What to do?
Solution: This is often perceived as a problem, but in fact, it’s a sign of health. Nobody is suggesting that the basic problems have been solved and we don’t need to change anything. We continue to improve – more power, less cost, easier management, more flexibility. Arthur Clarke once said that “any sufficiently advanced technology is indistinguishable from magic.” Sounds like a good goal to me. We simply need to keep up – and remember that it’s about the customer
Look this week for more of Merv’s insights. On Wednesday, Merv will discuss his five predictions of future trends, their implications and business opportunities.
I also encourage you to share your thoughts here on these interviews or send me an e-mail at firstname.lastname@example.org.
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Stephen Ibaraki, FCIPS, I.S.P.