TECHnalysis Research Blog

June 27, 2017
Business Realities vs. Tech Dreams

By Bob O'Donnell

Never underestimate politics.

No, not the governmental type, but the kind that silently (or not so silently) impacts the day-to-day decisions made in businesses of all sizes, and personal relationships of all stripes.

Even in the seemingly distinct world of technology purchasing, there is often a surprisingly large, though not always obvious, set of key influences that come from decidedly non-technical sources and perspectives.

In fact, one of the more interesting things you realize, the more time you spend in the tech industry, is that good technology is far from a guarantee for product or market success. Conversely, while there are certainly exceptions, a large percentage of product or even complete business failures comes from factors that have little to do with the technologies involved.

Business realities, organizational politics, industry preferences, existing (or legacy) hardware, software, and even people, as well as many other factors that you might not think would have an influence on buying decisions, often are way more important than the technology itself. Unfortunately, there seems to be quite a few people in tech who don’t recognize this, and a lot of them only seem to learn this the hard way.

From great startup ideas to innovative product incarnations from existing players, the number of new products that are thrown out into the world with the thought that the technology is good enough to stand out on its own is still surprisingly high. While I can certainly appreciate this nearly slavish devotion to the disruptive potential that a great technology can have, it’s still kind of shocking how many ideas get funded or get supported with little practical reality for success.

In part, this speaks to the staggering amount of money being lavished on tech-focused entrepreneurs these days thanks to the influence that technology companies are having even on very traditional industries. From the influence of IoT in manufacturing or process industries, to the rewriting of the rules for something as basic as retail groceries, the reach of the tech industry and people involved with it has grown surprisingly wide. As a result, there’s an enormous amount of money being tossed towards tech initiatives, but some of it appears to be done without much thought. Put another way, there sure seems to be a lot of stupid money in tech.

Of course, another reason is that accurately predicting major tech trends has proven to be a challenging exercise for most everyone. For every app store concept blazing a trail of new business opportunities, there’s a lot of 3D TV-like concepts strewn across the side of the road. Given that reality, it certainly makes sense to hedge your bets across a wide range of product and technology concepts to make sure you don’t miss a big new opportunity.

At the same time, companies (and investors) need to spend more time thinking through the tangential, historical, political, social, and yes, personal impacts of a new product or technology before they bring it to market. Arguably, there should be even more time spent on these non-technical aspects than the technical ones, but few companies are willing to make the effort or do the necessary research to really understand these potentially crippling issues.

With enterprise IT-focused products, for example, if a new offering has the potential to improve efficiencies for a given process or department but does so in a way that potentially eliminates the jobs of people in that department, it often doesn’t matter how conceptually cool the technology is because it’s going to hit resistance from existing IT personnel. In fact, some of the biggest challenges in trying to deploy ground-breaking new technologies in businesses are people problems (i.e., political), not technology ones.

In the case of a hot new technology like IoT, it’s not uncommon to find different groups with a particular vested interest within an organization getting into “turf wars” when a new product or technology consolidates previously distinct business segments or departments. Gone are the days when the only part of a business that buys tech-related products is the IT person or department—the lower cost and ease of use of many new tech products and services have democratized their reach—so the potential for these kinds of technological land grabs grows every day.

In the consumer world, the influence of “legacy” products, tech “fashion”, and other non-technical factors can be much bigger than many realize when it comes to consumer purchase choices. Whether it’s the desire or need to work with products that people already own, or a predilection (or disdain) for particular brands, these other non-tech issues are even more important to consumers than they are to business technology buyers.

The bottom line is that the tech purchase process for both businesses and consumers is far from the ivory tower, purely rational set of comparisons that many in the tech industry presume it to be. And, as tech further extends its influence across a wider range of our personal and professional lives, that separation from a simple rational analysis is likely to grow.

Great technology will always be important, but seeing that technology and its potential impact in the right context, and understanding how it may, or may not, fit into existing environments will be an increasingly important factor in determining the ultimate success or failure of many new ventures.

Here's a link to the column: https://techpinions.com/business-realities-vs-tech-dreams/50429

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.