Friday, 12 September 2008

consumer tools show the future of business tools

over thirty years ago I worked as a session musician (yes I am that old). The professional synthesisers, sequencers and sound processors that the major studios were packed with, cost many million of pounds. 

Over the next decade, consumer electronics companies started making consumer products that were able to do more and more of the things that previously only professional equipment could do. And then, these same companies (mostly Japanese) started producing 'semi-professional' equipment. This equipment generally cost between 20% and 50% of professional products and could do up to 80 or 90% of what specialist professional equipment could do. Each year the difference between the price points widened while the difference in functionality narrowed. How? The consumer manufacturers invested many times the research budgets of purely professional suppliers since they could amortise this investment across a far greater market. This pattern mirrored what was taking place in the computer industry where personal PCs ate away at the price points of the corporate server market (these days servers are really sup'ed up PCs). 

A decade or two later, the same thing started to happen in the industry I now was working in - the television and audio visual industry. Here, 'semi-professional' camera, sound and editing equipment devastated the professional video equipment market. Now the computers that edit feature films, news bulletins and television drama series are essentially the same as the ones you buy in any computer shop. 

Today, I believe we are reaching the same point with software. If I was betting between Oracle, SAP and the other corporate software solutions and the new generation of personal software tools in knowledge management, collaboration software and online applications, I would bet on the later. They will change faster, build customer bases more quickly and invest in product development more effectively. 


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