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Moving Forward
Prognostication about the digital future

January 2002 Corporate

Since we have entered the time for prognostication, I offer these visions of the digital future.

We all know the e-tech bubble has burst. All reasonable investors, employees, and entrepreneurs saw this coming. We should be impressed that we were able to keep it going for about a decade. Moreover, the spillover into other industries looks to be short lived unlike that of the property bubble in Japan of 1980’s and the results are acceptable compared to the Agentine Peso-to-Dollar peg. Another bubble will come, but it will never be the same where marketing hype is more powerful than actual product, user-benefits, and firm profits. Now to the real business of business. For the tech visionary and the pragmatist, we have work to do.

Consumer Market:

Networked Embedded Predictive Engines: Embedded circuits have already been placed in the automobile to the point that the typical car has far more computing power than the Apollo spacecraft did. Embedded circuits are now cost-efficiently placed in typical home equipment such as coffee makers, TVs, and answering machines. Likewise, networking consumer devices is entering the cost reduction phase in its technology lifecycle with 802.11 and Blue Tooth technology. Soon, these wireless network devices will become reasonable for average people to purchase. Yet networking embedded circuits doesn’t simplify life without a third technology – predictive software engines. Accepting that most VCRs, and now DVD players, have digital clocks that flash 12:00, marketers are well aware that most people have tired of setting clocks and preparing machines to turn on and off at the right time. Predictive software engines, that are able to detect where people are and what their next desire might be, would fill this gap. They would allow a consumer to set all the clocks in that person’s life at once, predict when the person might want coffee at 1:00 am when they are working on their next business plan, or proactively download a map to the person’s web enabled Palm on their way to the Tetons. The point of this market vision is that all the devices must be networked, (the coffee maker should know if the person is in town or not, perhaps through the mobile phone), they must be mobile (people move coffee machines and unplug them for cleaning), and they must be predictive (people find hitting the start button every day easier than programming the coffee maker with a highly variable schedule.) Hence, a visionary firm will create networked product line of consumer products with embedded wireless hardware that can communicate wirelessly with a predictive engine. Maybe Sunbeam can come back after Chainsaw Al.

Consulting Market:

We have seen ERP, SCM, CRM, and a host of other acronyms of software for businesses. Some, actually included ROI in their sales. XML and its ability to integrate the business community has yet to be played out. This technology is still in its infancy and needs to be nurtured to fulfill the promise of enabling firms to build once, integrate always. The same could be said for BEA and its middleware software. Yet, the initial efforts of tying systems together is expensive, time consuming stuff. The perfect world for the technology consultants out there. These networking technologies will enable the early adopter firms to both reduce infrastructure costs and attack more markets at the same time. Along this vision are P2P and hosted communities.

Handheld Market:

We all know that airlines earn the lion share of their profits from business travel. What we may be unaware of is that only 5% of the workforce travels regularly for business. Market plays that capture this highly mobile 5% of the business community will have a defensible niche in which to earn future returns. What will it take? Business applications on the handheld. For instance, move the CRM software off the laptop and into the PDA complete with a relational database that allows salespeople to review, update, and manage their sales process from the Opportunity, Contact, Competitive, and Company viewpoint. Likewise, move the PowerPoint presentation off the laptop and onto the PDA, (like Windows CE devices) and enable the business person to travel lighter. Or, move the complex pricing configurators to the PDA. All of these plays should produce defensible product expansion strategies for existing market players. For new entrants, they will have to start with the barrier to entry of displacing the existing infrastructure. This will be a difficult play.

While the high-tech bubble has burst, there are still some good work out there to be done. People still bough tulips, sent freight over railroads, incorporate plastics into products, and put DRAM chips into devices. Likewise, software and some form of the net will still be around over my career lifespan. Now, business must pick targets, differentiate products, and bring whole solutions to the market. TI is still around after 60 years, so will many of today’s bright young stars of e-tech. Winter storms pass. Sailboats motor to Lake Michigan. People go outside. Business marches forward. I will too.

The May Report, January 10, 2002



About the author

Tim J. Smith, PhD is the Managing Principal of Wiglaf Pricing, and an Adjunct Professor at DePaul University of Marketing and Economics. His most recent book is Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures.

Tim J. Smith, PhD
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