A Call
to Arms: Content Technology Works!
This article is a call to arms, an announcement
of The Gilbane Reports intentions to extend its editorial horizons and a
recipe that will help accelerate a healthy content technology sector recovery.
At the conclusion of this article, there are suggestions for actions that
you can take and a request for you to participate in a new Gilbane Report
initiative. We look forward to your comments and response.
Every corner of the economy has suffered over the past
few years, yet everyone can probably agree that the technology sector has
been especially hard hit. This article explores the unique characteristics
of our market in order to better understand the seemingly unrelenting downward
pressure we have been enduring and, much more importantly, to prescribe proactive
measures we can take to accelerate a healthy recovery that includes increased
enterprise productivity, improved market valuations and accelerated content
technology adoption. Does this sound too good to be true? We dont think so.
The underlying premise for the following material is
a simple one: it is that, at the end of the day, content technology works. Given all of the qualifiers about
proper expectations, requirements and resourcing we at Gilbane passionately
believe that content technology is a potent force that will continue to offer
everything from efficiency improvements to game changing innovations. No single
vendor, investor or analyst can corner this market because the underlying
value proposition is so strong and broad that enterprises will always have
viable options and alternatives in how they choose to move forward. This begs
the question why are we struggling and what can we do to right this boat?
From
troubled waters to smooth sailing: harnessing forces beyond our control to take us where we want
to be
Regardless of the metric, there can be no doubt that
we are at an economic low tide. Technology suppliers are consolidating, supplier
and consumer organizations are being slimmed down to their bare bones, sales
are still sluggish, new customer acquisition rates are meager and the average
transaction size continues to retreat; but enough doom and gloom this is
an article about harnessing economic and social forces that are beyond our
control to take us where we want to be.
Reactions to the receding tide: never panic in an undertow
As the economy receded, consumer/supplier
interaction exacerbated an already precarious situation. Figure 1 details
the interaction between enterprise consumers and suppliers that have combined
to pull our sector even deeper than prevailing economic factors might dictate.
As economic hurdles arose and consumers were forced
to be increasingly selective in the projects they funded, vendor reaction
was to become more strident and hyperbolic in their value propositions and
claims for an ROI.
This had the unintended consequence of alienating enterprise consumers and
further extending timelines for technology funding, selection and implementation.
The one-two punch of depressed IT budgets and an alienated
consumer base led to true economic starvation for all enterprise suppliers.
The highly visible instability of virtually every supplier added fear and
uncertainty to the already cash-strapped and skeptical enterprise consumer
creating the economic undertow that has brought the content technology sector
to its current low tide.
Enterprise suppliers were forced into a survival mode
where operations, R&D and staff were re-aligned (and trimmed) to focus
on short-term revenue. While cutting waste and focusing on near-term survival
makes perfect sense when you are fighting to simply stay afloat, to do so
for a prolonged period has serious and potentially far-reaching consequences.
Figure 1: A view beneath
the surface illustrating the interactions between supplier and consumer that
contributed to the sector-wide economic undertow
The economy is (or will soon) be turning a corner
it always does but how quickly the content technology sector rebounds and
in what final form it emerges will in large part be determined by how effectively
businesses can move beyond the minimalist doing as little as we can as late
as we can posture to effectively and confidently using content technology
as a competitive weapon.
Again, we beg a question, how can we move forward effectively
and confidently seemingly against economic, operational and social/political
currents? A short dive into the behaviors of suppliers and consumers reveals
a path forward that is both simple and, for the most part, risk free.
ng
ideas and inventions into new contexts and in so doing bestow entirely new
(and improved) value propositions was the fastest means to have the greatest
impact. We are going to import some good ideas from outside of our industry
with the expectation that they will have some important and significant consequences.
While there are certainly many ways to be successful
(and even more ways to fail.),
one proven method is simply to observe another person or organization that
has accomplished what you seek and to imitate their habits. This approach
has been successfully applied by Stephen Covey in his Seven Habits Of Highly
Effective People, by Jim Collins in his Built to Last: Successful Habits of
Visionary Companies and even by Tony Robbins in his Personal Power series.
If we assume that content technology works, then we must do more to ensure
that best practices are widely understood and properly applied. Sound simple
and obvious? Its as simple as selling more to generate revenue and not eating
to lose weight. In other words, there are usually deeply held behaviors that
need to be unlearned before the obvious can be achieved.
The ebb and flow of content technology
Figure 2 represents the three basic elements of an enterprise
content technology solution: Infrastructure,
e.g. ubiquitous, highly generalized technology such us Sun One or .NET components;
premium applications, e.g. specialized
and sophisticated applications solving high value and hard problems such
as CRM, ERP or ECM; and finally site-specific
development/customization that is required to integrate the commercial
components into the day-to-day operations of the enterprise.
Figure 2: the elements
of an enterprise content technology solution
The ebb and flow arises from the tendency for features
and functionality to flow downwards. Platform vendors naturally take note
of what high value problems premium application vendors are pursuing and work
to find ways to further generalize and commoditize these features to add more
value to their underlying platform. Premium applications vendors are always
sensitive to the degree of customization and integration that is required
of their products and work to commercialize those work items that are most
common and problematic for their customer base. Integrators and onsite developers
are skilled at staying afloat as platforms and application stack rise. Integrators
adapt by simply reaching for higher and more ambitious solutions to take their
enterprises to greater levels of productivity and efficiency.
The more subtle point to be made here is that to be
commercially successful at these three levels requires a fundamentally different
organizational and operational structure. It is in fact extremely difficult
for an integrator to evolve into a premium application provider or for an
application provider to evolve into a platform supplier.
There are numerous cases where organizations have tried
to subsume two or more of these categories only to discover that they have
sabotaged their own business model and brought down their business as a result.
In difficult economic times, the temptation to try to do it all and leave
no dollars on the table is at its highest. Ironically, a suppliers ability
to grow beyond its current business is at its lowest. This is the worst time
for a vendor to try to expand its offering.
Three degrees of separation
Each specific enterprise solution calls for a unique
recipe that combines the basic elements (platform, application and integration)
in different ways and different proportions. Figure 3 illustrates the spectrum
of mixtures and the motivations behind them.
Figure 3: Three recipes
for an enterprise solution and their essential characteristics
The least attractive solution is one that cannot rely
upon any application and depends on custom development for the majority of
its functionality. This is expensive, highly skilled labor that is only justified
by a set of requirements that are both substantially unique and promise to
fill a mission critical function for the sponsoring enterprise. The intermediate
recipe is one that still requires non-trivial configuration and integration
but is substantially driven by an underlying enterprise application. As such,
the hurdle is lowered somewhat to include capabilities that offer material
advantage that is worth the commitment and risk inherent in any large IT initiative.
The final recipe is the overwhelming preference a solution that is shrink-wrapped
and turnkey. Ease and speed of installation and adoption make this the most
desirable and simplest to justify.
Suppliers are keenly aware of this dynamic and do their
best to package and present their offerings as far to the right in this
spectrum as possible through packaging and partnering. Difficult economic
times often push marketing too far ahead of the reality of their actual offerings.
This results in missed expectations, over-commitment of limited resources
and disappointing customer experiences. Often, the resulting damage to an
organizations reputation is unrecoverable and in some cases can mortally
wound an entire technology market segment.
Relative market size
Figure 4 shows that market size and cost per seat for
enterprise content solutions are inversely proportionate and that they are
both directly influenced by the proportions of platform, application and integration
required.
Figure 4: Market size and cost per
seat are mapped to the spectrum of enterprise recipes
Figure 4 illustrates
- Price point and simplicity as
the enterprise rationale for turnkey solutions when they can find them
- Market size as the driving force
justifying the size and market valuations for suppliers in each of the three
market segments
- Potential for growth as the primary
motivation behind suppliers efforts to swim upstream and why the existing,
better-funded competition makes it so difficult to do.
Figure 5 illustrates the results of a downward economy
on these interrelationships. The essential dependencies remain unchanged;
however, the total market size (area under the curve) and the price per seat
are both significantly reduced.
Figure 5: Difficult economic time depress
market size and cost per seat
In a difficult economy, suppliers are attracted to deeper
waters. However, their neighbors upstream are also starved and migration is
often impossible. Suppliers are forced to shed excess costs and attempt to
recover from misdirected efforts to move into waters where they never belonged
in the first place.
Results and implications
The first consequence of an economic
contraction is that vendors do everything they can to ensure that they leave
no opportunity unexplored and no piece of business ignored. The danger is
that vendors reach can exceed their grasp making already ambitious expectations
virtually impossible to meet.
The second reaction is that suppliers become increasingly
focused on the immediate needs of their target markets. Here, the danger lies
in the fact that a potential customers expectations are not always realistic.
This becomes especially likely as enterprises are themselves under increasing
pressure to demonstrate the value of their own technology investments. Some
vendors fall into the trap of telling prospects what they want to hear; that
they offer a turnkey solution to their unique enterprise requirements with
a proven ROI. As these expectations are inevitably missed, the credibility
of both technology suppliers and enterprise IT organizations are damaged.
One of the riskiest moves a technology supplier can
make is to move the entire organization into a new category that appears to
offer greater opportunity. New requirements on engineering, sales, services
and support can drain already overtaxed organizations leading to diminished
capacity, a drop in quality and low morale. At its worst, this becomes a self-fulfilling
prophecy where the supplier truly is unable to deliver significant value and
ultimately fails as an ongoing business concern.
The net result of all of these actions and reactions
is that enterprise consumers have adopted a posture of do as little as we
can as late as we can. The effects on technology suppliers are painfully predictable:
- Longer
sales cycles
- Smaller
transactions
- Costlier
sales processes
- Fewer
projects
- Slower
pace of innovation
A perceived decline in content technology evolves into
a true decline in the value of technology, the technology sector and the IT
professionals within enterprise organizations.
A rising
tide will lift all crafts
While there is not a lot that we, the stakeholders in
the content technology community, can do to impact the global economy, there
are specific strategies that we can adopt to increase the value of content
technology, the credibility of our value propositions and the contribution
of IT professionals and knowledge workers. Technology suppliers, integrators,
consumers and even investors can take steps that offer immediate benefit and
work to reverse the downward spiral that the difficult economy has begun.
Communicate successes
Share what you are proud of and what has impressed you.
Include practical advice on funding, measuring success, driving adoption and
of course, technology options, innovations and best practices.
Replicate success
Find others who have gone where you want
to go and learn from them. If you are approached by someone who would like
to replicate your success take a long-term view and share your experiences.
Avoid rubber necking
While it is often hard to resist the temptation to focus
on failures, dont confuse this guilty pleasure with learning from success.
While it is true that one may learn to avoid some dangers through a better
understanding of someone elses misfortune, you do not typically come away
with enough information to assure your success.
Turn
the tide!
Play a proactive part in developing and broadcasting
better and broader understanding of best practices and bona fide successes.
The cumulative effect on the content technology sector will be improved confidence,
shortened selection and deployment cycles and an increased appreciation for
all that we know to be true about the value of content technology.
Revisiting the ebb and flow of content technology
In order to properly model the content technology community,
one has to take a holistic view that includes every stakeholder from the technology
vendor through to the enterprise consumer and all of the organizations in
between including integrators and investors. Figure 6 gives a view into the
major stakeholders in the content technology community and the primary public
forums that they operate within. Public forums serve as both leading indicators
and catalysts in driving market behaviors.
Figure 6: A holistic view of the entire
content technology community
Community settings such as conferences, all manner of
publications, and other neutral organizations both reflect and have influence
over the technology sector. A healthy recovery must take advantage of trusted
and neutral community settings to emphasize and amplify positive trends, e.g.
best practices and success stories. We should all participate in those forums
that embody a concerted and credible program to accelerate the adoption and
validate the value of content technology.
Breaking
the fourth wall: Gilbane Content Technology Works
There is a literary technique known as breaking the
fourth wall. This technique is used when the plot of a story calls for some
event to take place that shatters the barrier between the fictional world
of the story, and the "real world" of the audience watching the
story. While there can be no doubt that the story being told here is all too
real it is still a world view, and you, the reader, are in the real world
that this article covers.
The Gilbane Report is going to break the fourth wall.
Starting immediately, we are going to extend our editorial interest to include
content technology best practices and success stories.
The Gilbane Report is going to administer an industry
initiative called The Gilbane Content Technology Works Program. Under the
auspices of this program, best practices and success stories will be documented,
assessed and published. The developed material will be presented in our conferences,
published on www.gilbane.com and where appropriate,
included in The Gilbane Report.
The enterprise speaks
This material will be developed in collaboration
with enterprises willing to share their experiences and will be written in
the enterprises voice. Final editorial review and the essential components
of these works will be set by the enterprises whose stories we relate. We
expect the following results:
- Strong
opinions will be expressed about what worked and what did not.
- The
narrative will be jargon-free and authentic.
- Best
practices including strategies for securing funding, end-user adoption and
other important considerations beyond technology will be shared.
In order to ensure that this information reached the
widest audience, this material will be shared at no cost.
As this material is developed, published case studies will be made available
to the public at http://www.gilbane.com/technology_works.html
Profiles in courage: industry support
Developing this material will be labor
intensive and time consuming. In order to be able to develop this valuable
information at no cost to the consumer, we have invited leading content technology
vendors to join this initiative in partnership with The Gilbane Report and
to subsidize the expense of developing and distributing content technology
best practices.
Note that the enterprise will retain complete editorial
control. Vendors cannot dictate which enterprises we collaborate with and
will, in all likelihood, be supporting success stories that do not include
their technology.
Our founding partners are clearly passionate about the
value of content technology, believe that best practices can act as a force
to raise all crafts, and are secure in the value that they offer their markets.
Please join The Gilbane Report in expressing our gratitude to our founding
partners:
- Software
AG
- Sun
Microsystems
- Artesia
- Atomz
- Context
Media
- Convera
- Vignette
- Webware
This is a program that is unique in: its ambition to improve the climate of our market
segment, its organization that
promotes best practices without a specific commercial agenda, and its composition including the entire content
technology community; enterprise consumers, suppliers, and all stakeholders,
administered by a neutral third party (The Gilbane Report).
What can the reader do?
What can you, the reader, do to participate
in this program? First, you can visit http://www.gilbane.com/technology_works.html
and tell us that you care about receiving this kind of information and share
some information about yourself including any willingness to share a project
that you know of or are proud of. All of this information is kept strictly
confidential and is not shared within anyone outside of The Gilbane Report.
Stay tuned as we prepare to do our bit to improve the
climate in our little corner of the world.
Sebastian
Holst, Sebastian@gilbane.com
