The theme in Software 2007, held in California was, “The wave of innovation“, the Software ecosystem in entering as we breathe. With some excellent talks by leaders representing many leading facets of the software industry, the outlook seems positive and supporting. You could also check my previous blog on innovation.
In a recent McKinsey survey on innovation, high tech respondents who ranked innovation as “very important” or “the most important” showed significantly higher revenue growth and profitability than those who ranked innovation as less important, as shown in the diagram below. The combination of these internal and external trends indicates that the software industry must keep innovation a top priority in 2007 and the years to come. You can download the Report at my esnips account here.
The new innovation has been defined as “bottom up and Center out". This new kind of innovation is different in direction from the one which existed in the industry earlier and was primarily in a top-down fashion.
So, what the good news??
Vendors and customers alike are very positive that much more innovation is yet to come. Look at the customer responses about their perceived position in the innovation wave.
Show me the money
Let us talk about earnings and investments. The graphs below would surely help us get the objectivity and tangibility in the picture..
So with this good news in place, what is the suggestion for vendors and customers??
The customer’s paradox– They want innovation as the top thing from a vendor and they expect most of it to come from the smaller vendors but as the figure below shows, they’re all after CATCH-22.
The software vendors need to adapt to the new bottom-up and center-out diffusion model and keep a good balance between the focus on innovations from Products-technology, Business Models and processes.
I will be posting more on the new bottom-up and center out model and the new innovation areas.
Posted by:Digvijay Singh Rathore