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Innovation Has Left the (Enterprise) Building

Bret Fitzgerald

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May 13, 2014 2:23 pm

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InnovationOnce, the workplace had technology homeowners could only dream of. Now you might as well stay at home.

In the 1970s and 1980s, large corporations had mainframes and laser jet printers that seemed impossibly advanced compared to the technology available to the average consumer. Nowadays, you’re more likely to find the latest tech in your teenagers’ bedroom or to see your spouse wearing it. Large corporations no longer seem to have the best technology.

Are innovators ignoring the enterprise or is the enterprise ignoring innovation? Forbes thinks enterprises are ignoring innovation (and wasting R&D budgets keeping old programs afloat). Instead of running labs or inspiring innovation internally, many companies have taken to buying it. There’s a fairly common model in which companies purchase startups as a way to innovate and drive growth. You can think of Google and Amazon buying robot and drone companies, Facebook buying Instagram or Cisco buying Meraki.

Yet it certainly seems like innovators are ignoring the enterprise too. On a FastCompany list of the most innovative companies, all of the top ten cater mainly to the consumer. A few (like Google) have offerings whose secondary market is the enterprise, but most do not. Maybe this is because these companies aren’t enterprises themselves. Google, Nike and Xiaomi are, but most of the list is made of startups just growing up and into the enterprise world, such as Dropbox and Netflix.

Companies once targeted enterprises when building products, particularly in the IT world. Think about IBM selling mainframes, Cisco selling switches and Microsoft selling office software like Excel. But modern technology is much cheaper than technology used to be. The Programma 101, the first commercial desktop personal computer, would cost $23,000 in 2011 dollars. Today you can get an iPad 2 for under $300, and according to one benchmark, it’s as powerful as a 1980s Cray supercomputer. This price decline allowed companies to start targeting consumers as well as businesses, which is exactly what they did.

And now business has swung all the way to the other end of the spectrum; companies don’t just target consumers in addition to enterprises, they target consumers alone. Enterprises are ignored, and that means only a certain kind of product gets developed. These products focus on ease-of-use, which individuals value, rather than security or stability, which large corporations and government agencies require. So now you have new products like Google Docs, which is a step backward in functionality compared to Microsoft Office, and Dropbox, with its various data breach issues.

As the prize audience for companies, consumers now have all the power. Will the pendulum ever swing back the other direction? With technology prices as low as they are, it’s unlikely that companies will ever be forced to cater solely to enterprises. Instead, if enterprises no longer want to be ignored by innovators, they will have create or demand better technology, so going to work no longer feels like going to a museum.

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1 Comment

  1. Really interesting post. Technology is advancing at a much faster rate today.

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