Life can be uncomfortable at the cutting edge

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When British Prime Minister Harold Wilson invoked “the white heat of technology” he was expressing 1960s optimism rather than outlining a detailed vision of the direction outdated industries had to take.

Forty years on, the digital revolution has focused thinking on how information technology can push boundaries back but the problem of applying radical ideas to the real world remains.

Stephane Garelli is a professor at Lausanne’s IMD Business School and a former senior adviser to Hewlett-Packard. He is cautious about the whole concept of the “cutting edge” and thinks that most businesses share this attitude.

“A cutting edge can be a very dangerous process for a company. Being there does not always mean being successful. Despite what they say in public about embracing new technology, most corporates are risk averse,” he says.

Prof Garelli cites himself as an example of how the constant pressure from suppliers to upgrade software has to be resisted on occasions: “I use an old version of PowerPoint to present with because the latest release cannot work with every computer at every conference.”

Manufacturers have an obvious incentive to force the pace of change but recent history has proved that consumers will choose their own rate of adoption.

The meteoric acceptance of personal computing, followed by e-mail, the mobile phone and then the internet culminated in the dotcom fever of the late 1990s.

What the dotcom missionaries had failed to recognise was that the public were becoming weary of change.

A lukewarm reaction to the initial wave of internet retail services burst a stockmarket bubble and realigned IT growth with consumer appetites in the real world.

Internet telephony has been available for a decade but it required a level of dedication to technical tinkering that few customers could be bothered to embrace.

The global rise of broadband connections created a vehicle for mass adoption that Skype, the online calls provider, could exploit from its launch just three years ago.

Now Skype has been bought by eBay for $2.6bn. The secret of this astonishing success is not cutting-edge technology, but timing and a determination to configure a simple service for ordinary users.

Niklas Zennström, chief executive and co-founder of Skype, points out that while internet telephony existed long before his business, “mainstream consumers were turned off by poor sound quality and how difficult it was to set up”.

Simplicity matters to a mass market. In this spirit, Siemens’ latest mobile phones take a step backwards. The CC75 and CF110 do not feature cameras or web access.

They are aimed at a segment of customers Siemens has identified who just want to make voice calls and swap text messages.

IBM has the world’s largest IT research operation. With a budget of $5bn and more than 3,000 scientists and engineers working in eight laboratories across six countries, it is associated with superfast computing projects and breakthroughs in the realm of nanotechnology.

But this effort has found a new direction: services science. The object is to apply engineering discipline to creating products or technologies that address business problems.

These products are then re-usable, and hence a potent weapon in the armoury of IBM’s own $45bn services business.

Mari Sako, professor of management studies at Oxford University’s Said Business School, works with IBM and believes that changes in the external marketplace have led it to reassess the very concept of technology research.

“What is really new is the way markets have been created in services such as outsourcing. So there is a lot of talk about innovation in delivering those services. But vendors must remember that what people want are functions that do not break down.”

This perception was confirmed when technology services group LogicaCMG polled clients on their priorities and discovered that innovation was the very last criterion they applied when purchasing IT.

Quality and delivery on time and budget were their prime concerns. Yet many suppliers are reluctant to abandon an attachment to innovation for its own sake.

Clearly, some users are won over by the notion of a cutting-edge product. They should beware.

As Prof Garelli notes: “The IT industry is very good at marketing, and very good at brainwashing.”

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