It’s not about recovery, it’s about reinvention!

Ever since Lehman Bros collapsed and we went into this accelerated financial tumble I have routinely been asked by vendors, end users, the financial investment community, and well, by most everybody I talk to, when I think the recovery will start and how long it will take. And of course the analyst in me keeps trying to answer but honestly, more and more, I’m convinced that it’s not the right question. I don’t believe we can or maybe even should recover if that means going back to the “good old days”. I am starting to believe that in a very many ways things will be fundamentally different (maybe are already fundamentally different).

We’ve been moving toward different for a while. The promise of the Web, which clearly was something different than what we thought in 1999, has started to play out. The tech industry itself has been in a different industry cycle since the “recovery” from our implosion in 2001-02. That was a surprise too, that tech is behaving much like other industries although our cycles are more compressed (but then our whole history is more compressed than other industries).

Anyway, so what do I mean? I believe that tech, especially software, is taking on a …

Ever since Lehman Bros collapsed and we went into this accelerated financial tumble I have routinely been asked by vendors, end users, the financial investment community, and well, by most everybody I talk to, when I think the recovery will start and how long it will take. And of course the analyst in me keeps trying to answer but honestly, more and more, I’m convinced that it’s not the right question. I don’t believe we can or maybe even should recover if that means going back to the “good old days”. I am starting to believe that in a very many ways things will be fundamentally different (maybe are already fundamentally different).

We’ve been moving toward different for a while. The promise of the Web, which clearly was something different than what we thought in 1999, has started to play out. The tech industry itself has been in a different industry cycle since the “recovery” from our implosion in 2001-02. That was a surprise too, that tech is behaving much like other industries although our cycles are more compressed (but then our whole history is more compressed than other industries).

Anyway, so what do I mean? I believe that tech, especially software, is taking on a different look but that’s not really where I am going with this post. We’re in a business change cycle that is widespread and far reaching IMHO. The social web is changing personal behavior, personal expectations that spill over into our business lives (well, maybe I should say the line between personal and business is getting very blurry, but that’s a subject for a different post). Our expectations of technology and how we interact with it has changed. Face it, in general enterprise systems are just not a great experience and businesses don’t generally operate in a transparent, open, social model where everyone has a voice. The old industrial age hierarchical model is suboptimal for the information worker. In the old (or is that current) model information is power so it’s hoarded. In the new world information is powerful when it is set free, the exact opposite of the current status quo.

We’re poised on the edge of a business reinvention. The power of the social web can and is being applied to business and will drive a substantial business change over the next few years. The software industry will exhibit some of those social changes and will also emerge with a re-focused business and refined business models. Some outward signs of the reinvention:

Software companies:

• Tech mega-vendors (which I written about here) will accelerate consolidation around their ecosystems
• Hybrid licensing models will prevail over pure plays, balancing efficiency and profitability with customer choice (SaaS, open source and on premise)
• Partners will also emerge in a hybrid model that blurs the lines between system integrator, independent solution vendor and value added reseller
• Significant consolidation will continue in the partner ecosystem for the next few years
• Open source software will continue to grow in acceptance and will increase it’s share of the application budgets
• Software companies will increase their social software offerings significantly as customer demand steadily increases. Offerings will include stand-a-lone social applications, social platforms and embedded social functionality in traditional software categories
• The demand for mobile and real-time solutions will drive innovation in software products
• Silo’ed products will give way to fully integrated process-based apps (the impact of SOA)
• UI level integration / mashup capabilities will be embedded and commonplace in the enterprise as end users require the ability to individualize the way they interact with business systems

Social Business movement:

• People become the core of the business focus (people as the platform)
• Business transparency becomes the cornerstone of compliance
• Shared control versus centralized control
• Ongoing incremental problem solving becomes essential (versus crisis problem solving that results from centralized problem solving) as shared control starts to involve a broader range of individuals
• Crowd sourced ideas (internal and external) drive innovation in products and services
• Customer, employee, supplier and partner interaction becomes a conversation
• Service delivered “when, where and how” customers choose
• Managing becomes coaching
• Information silos are broken down
• Prediction is a viable tool based on the analysis of social data (applies to employees, customers and partners)

I’m sure there are many reinvention attributes I’ve missed but hopefully you get the idea. What should we add?