As I read through Redhat’s latest stunt, Switchyard (which was pretty much a lot of text, no content and no code), I started thinking about the theory of The innovator’s dilemma.
All middleware vendors are now moving up the stack, shifting from standardized java containers towards less standardized and more advanced integration products. (ESB, Integration bus, SOA suite, the beast got many names). If you know me, or read my previous posts you’ll know what I think of these products. I believe they are making integration overly complicated to support the perceived need for a generalized approach to integration. At the moment a lot of companies are drinking the integration platform Kool-aid, then again many are not.
How does this relate to the innovator’s dilemma? Well, Christensen’s theory (based on empirical research) is that in the beginning innovators are getting high margins, benefiting from being first to market. However, as their product is commoditized they will add additional functionality to their product, in order to defend a higher price, maintaining their margins. As this functionality is becoming mainstream, they gradually lose more market shares. As market shares is lost in the middle and low end the incumbent will scramble to hold on to it’s high-end customers, until finally they (the customers) will look at the product and come to the conclusion that the one they are using is far in excess of their needs. Which will result in them switching to the, now mature, challenger. The incumbent has been displaced.
My belief is that we are now at the point where the incumbent (commercial vendors like IBM, Oracle and perhaps Redhat) products are too advanced and stacking features that is not needed (although many will use them, once they’ve bought the product).
What I’d be interested to see is if more customers will realise this and move towards simpler and cheaper (free) products. Open source has already put a dent in the commercial vendors’ revenue stream, but will it be able to take the majority of the business in the middleware market? I sincerely hope so!
All middleware vendors are now moving up the stack, shifting from standardized java containers towards less standardized and more advanced integration products. (ESB, Integration bus, SOA suite, the beast got many names). If you know me, or read my previous posts you’ll know what I think of these products. I believe they are making integration overly complicated to support the perceived need for a generalized approach to integration. At the moment a lot of companies are drinking the integration platform Kool-aid, then again many are not.
How does this relate to the innovator’s dilemma? Well, Christensen’s theory (based on empirical research) is that in the beginning innovators are getting high margins, benefiting from being first to market. However, as their product is commoditized they will add additional functionality to their product, in order to defend a higher price, maintaining their margins. As this functionality is becoming mainstream, they gradually lose more market shares. As market shares is lost in the middle and low end the incumbent will scramble to hold on to it’s high-end customers, until finally they (the customers) will look at the product and come to the conclusion that the one they are using is far in excess of their needs. Which will result in them switching to the, now mature, challenger. The incumbent has been displaced.
My belief is that we are now at the point where the incumbent (commercial vendors like IBM, Oracle and perhaps Redhat) products are too advanced and stacking features that is not needed (although many will use them, once they’ve bought the product).
What I’d be interested to see is if more customers will realise this and move towards simpler and cheaper (free) products. Open source has already put a dent in the commercial vendors’ revenue stream, but will it be able to take the majority of the business in the middleware market? I sincerely hope so!
Borrowed from http://theagileexecutive.com/2009/01/27/enterprise-software-innovators-dilemma |