htulog

From a customer perspective, when looking for something to buy, the details are meaningless in front of the desired outcome. Let’s say you want a new suit. You have two options, either buy it from a shop and adapt it so it fits you or hire a tailor to make a custom one for you.  In both cases what you are looking for is the final outcome: a shiny new suit.

In the software industry is almost the same case. Customers are looking for the final outcome rather than “ingredients” (read technologies). Most tech companies fail to understand this basic business concept. I’ve seen this happening among the ones selling services like development, support or consulting. Companies tend to advertise their technologies as their selling pitch and business proposal.

The mistake is often related to the fact that technical people confuse the production tools with the final product. With the intention to differentiate among their counterparts in the industry, tech companies choose tools to help them build final products. The issue here is that for the market what’s relevant is the final product you deliver rather than what you happen to use for making it.

Brian Prentice, from the Gartner blog network, elaborates on the subject, from the opensource perspective. He correctly points out:

open source is not a value proposition in its own right.

By this he means that the sole promise of open source, or FLOSS, understood as their licensing benefits, is not a value proposition by itself for customers in order to convince them to buy it. This can be also applied to our example: tools are not a value proposition by themselves. What the customers are looking for are other aspects that offer value: better support, maintenance and lock-in conditions.

He also states, regarding the opensource landscape, that eventually the more adoption of it will make it more visible and by consequence more likely to be serious scrutinized. For that, marketers of such products will have to construct a selling value proposition that will be far from the technical details. This, of course, is also a good sign of maturity in the FLOSS ecosystem.

Back to our initial subject, companies must pay more attention to the final outcome from the customer POV than to their “production and manufacturing process and tools”, which are internal assets. So, next time you set a board meeting ask yourselves what do you sell and compare it to what customers buy from you currently and what’s important for them, and for your targeted market.

A very good example of this is the new Austin-based startup Gowalla Inc. This company sells:

free location-based travel game that lets users share where they are and track their friends as they move around.

Which happens to be build on the Ruby On Rails open source stack.

Last week Google announced a developer version of a new product. Google Wave’s proposition is to become an online collaboration and communication tool. Certainly something some of us have heard before, as our friend Max Ugaz notes recalling Lotus Notes’ origins. While it represents a nice move ahead on tightly integrating Google’s actual offering with Google Apps and an advancement on the design of a product conceived and designed for today’s needs and mindsets, I’ll elaborate a bit on what this might represent for business.

What it represents

As Wave’s technical head asserts Wave is intended to become rather than a product a platform and a protocol. By open-sourcing it’s source code Google is expecting to foster an ecosystem in the same fashion Linux have done on operating systems. Google I/O was the right venue for this announcement. Thousands of developers and smart people looking for something interesting and challenging will start to build things on top of it. This will produce a important number of products with different business models and targeted markets.

How business can adopt it

An opportunity window is presented to business who want to develop solutions and for those who are willing to bump productivity, improve time-to-market timing for product and services creation, even customer relationship and many others customer-oriented aspects can take advantage and benefit of this.

Are we ready?

Collaboration is something not many organizations completely understand and fully practice. It’s has a lot less to do with technology than with business culture, leadership and human attitude. Often organizations who do have strong internal culture and process definition take a lot more advantage of tools supporting their activities. By the time Lotus Notes appeared it offered new ways for boosting collaboration, it wasn’t just Email, as some missunderstood. However, then Microsoft came with an offering that was a lot more simple and offered just message exchanging. Savvy orgs adopted Lotus and built on top of it. Today, the story seems to start again. I’m confident that orgs who do have a strong culture will quickly move to such technology but the others, which still might be transitioning to something such a hosted or cloud services, will have to strike and their competitiveness will slow down.

I’m adventuring to elaborate on this because collaboration isn’t a techonology it’s a mindset and attitude. Techonology always will be subordined to people’s mindset. That’s why we have an ecosystem with many different offerings. It’s a matter of how people sees and understand their world rather than the current offering. For Wave the scenery today is different, N-genders and digital natives are taking more important roles in society, this could be the key for orgs to switch from old paradigms to a world seen by today’s inhabitants.

In the traditional economy business struggle for capacity, resources allocation, storage and physical space. Digital economy has rather different rules. In the digital economy the focus is no longer in these particular aspects. Digital businesses are capable to take advantage of information and data management to get the most of it. Information and data storage is not enough, what you can do with that to take advantage and be competitive is.

Moved to EBay

These pictures are from a marketing campaing for Ebay developed by the agency Mortierbrigade in 2006. Let that apart, they clearly represent what’s happening today with businesses. Physical storage of goods are no longer the core, product and consumer data is. What can you do with that is the difference between you and your competitor.