The Ripple Effect: Part 1

One of the things I like to do is put together the pieces of the technology ecosystem puzzle.  How do technology tidbits interact, depend on one another, or conflict?  This exercise is interesting and challenging in its own right.  But the game ascends to another level when a piece part is changed or a new one is introduced.  Will the new piece make it into the puzzle or is the existing framework too inflexible to allow it?  If it does, what existing piece parts need to be changed or eliminated to make room for the new piece?  How far does the impact reach?  This is the Ripple Effect. 

The value of systems start-up companies is strongly correlated to the strength and depth of the Ripple Effect created by the introduction of their products (or puzzle piece parts) into the marketplace.  If a new piece part fits in quite smoothly under current “best practices” thinking, then it is probably a point solution.  Now this point solution may be quite valuable, but it doesn’t represent a new product category, a new way of thinking, and therefore act as the launching point for a highly valued new company that will make its mark on the industry and create a new set of related opportunities for other companies.

New ideas and products with large Ripple Effect implications have been few and far between in recent years.  There are a couple of reasons for this. (1) Buyers of technology haven’t been taking risks the last few years.  They are not generally looking to use technology as a competitive advantage, but instead are trying to prevent it from becoming a disadvantage, focusing mostly on just keeping what they have running as well as possible with fewer resources assigned to the task. (2) The IT technology community (networking, telecommunication, computing) has been operating in a low level state of innovation for several years now.  We hit this state even before the financial bubble burst.  But it has become even more obvious and acute since the bubble bust.

Basically, for the past few years, the networking industry has been riding the remaining (but dampening) waves related to the last two tidal wave Ripple Effect producers – the PC and the browser.

PCs and shared printers begat LANs (and hubs and routers and distributed management) which begat WANs (and more routers and Frame Relay and ATM infrastructure) which begat an Everything-Over-IP and IP-Over-Everything mentality which begat higher performance LAN switches and WAN routers and extended uses of IP such as VPNs and VoIP.  These begat more deployment of networking technology, which begat the development and deployment of information-based workflow processes which begat a whole new way of working and communicating. 

Browser leveraged the infrastructure that PCs begat and provided a mid-life kicker to the technology by begating (if there is such a word) the Internet as the world’s distributed database, and whole new ways for companies to interact with their customers and other companies which begat Web Services and a whole bunch of new security issues and solutions. 

Whew!  

Basically, just about everything interesting in IT technology that has been created in the last 25 years from the point of view of successful products and companies, has ridden the wave of these two highly disruptive forces, one which was birthed in the late ‘70s and early ‘80s, and the other in the early-to-mid ‘90s.

But…the impact of these effects has been dampening out and that is truer today than ever.  I don’t see anything on the horizon that could have the same kind of tidal wave Ripple Effect that PCs and browsers did. 

This makes life in the IT technology arena a lot less interesting.   It’s become a big company game and a low cost manufacturing/distribution game. 

That creates a problem for me because I’m more about creating or identifying the disruptive force today that can fly beneath the radar screen of the big technology companies for awhile, but that will eventually change the balance of power, causing a whole bunch of things to be re-thought and re-optimized, and creating a slew of new opportunities for new product types and vendors.

Unfortunately, for the past few years, I haven’t seen much or had any idea myself that meet the criteria for creating a large Ripple Effect.   But that changed recently.  Not too long ago I was introduced to something that I think will have some very real Ripple Effect. Not on the scale of PCs and browsers, but given the state of the industry, still a reasonably big Ripple. 

Will talk about this more in the next three Musings.