Wharton Chapters 8 - Commercializing Emerging Technologies.

In chapter 8, the author describes capitalizing on new technologies in the marketplace by watching their success and failures and determine how to improve the product in the market or couple complementary technologies (either products or services) with the new technology to succeed. There were three challenges of commercialization discussed in the chapter:

• Change in Complementary Assets - As the market changes with new products and services, the existing complementary assets can become obsolete (ie. training and sales staff on eletromechanical calculators example).
• Change in Customers - Customer needs evolve with technology and with new products and technologies, the set of customers also change (i.e. typesetting in offices replaced by word processors for all users -new market segments)
• Change in Competition - Competitors change as technology in the market place changes and new market niches emerge -new competition arises as well

The author stated three hurdles emerging technology must overcome:

• whether to invest in developing new technology
• using the investment to develop or acquire new technological capabilities
• commercializing the technology.

A great example of commercializing the technology is the shift from analog watches to digital watches. The analog watch was carefully crafted by the swiss until the introduction of liquid crystal displays and LED's for digital displays. The skilled staff to create the watches was no longer necessary as the manfacturing process to mass produce was farmed out all over the world and digital display watches began to outsell analogs because of cost. Many of the larger companies (Seiko, Casio) began watching the other manufactures and merged companies and products. The mass commercialization of watches could hit new markets because the watch become both affordable and available to all types of consumers. Information taken from "Swatch and the Global Industry" - http://eres.boisestate.edu.libproxy.boisestate.edu/eres/docs/10483/swatch_and_the_global_watch_industry.pdf

Wharton Chapter 7 - Technology Strategy in Lumpy Market Landscapes

In Chapter 7, the technologies developed by companies must determine the direction of the market to determine how to design their products. In the laptop example, the manufacturer looks at both durability and component weights to give the best balance for a rugged, yet high performing laptop. Companies must understand the barriers and determine which ones to push with emerging technology.


The book discussed the "dimension of merit" or the set of attributes to a technology that the user finds valuable and preferable. These preferences create uneven groups of customers or "lumps" in the market. The goal of these emerging technologies is to find the "most favored attribute set" within the market to capture the largest customer set and marketshare.

The firm can then make a choice -focus on a niche market and be vulnerable to competition. Small changes in the attributes can cause a shift and can lead to greater or fewer customers based on the lump in the market. Many disruptive technologies fail to mee the needs of the intended market. These technologies then focus on niche markets which allows the attribute set to grow more rapidly, allowing the technology to infultrate new market segments.

Strategists use an attribute matrix and evaluate customer reactions and responses to the technology. The spectrum of responses are broken down into 3 components:

• Basic: a basic attribute that is expected in an offer but gives no real value in the market but can preclude the firm from the market if not included
• Discriminators: attributes that distinguish the technology in the market (can be both +/-)
• Energizing features: These are typically new attributes that have a sharp distinction in comparison to other offerings and great influence on the consumer .

After the attributes have been determined, the constraints to bring these attributes to market must be determined and evaluated. Companies evaluate the market landscapes to push barriers and look for technologies that will help improve positioning. Other companies have technologies and are in search of markets. Companies can use three strategies to position themselves in the market:

• Niche dominantion - company offers a product to a niche market and creates or moves the technology barrier or constrains the attributes available in the market
• Niche fusion - the fusion of two or more niche markets allowing a firm to dominate the fused niche markets. The attributes of the products are favorable among many niche markets
• Create a new technology envelope - radically changing the set of attributes to offer superior products or brand new products to consumers. The shift can put firms out of business and change the market landscape.

This concept of lumpy markets can be seen in the digital and film SLR camera markets. Camera uses were either point and shoot operators to high end photography professionals. The markets were lumpy based on the the type of camera users and the products avaible to those users. When digital photography took off, some of the film markets dried up and looked for new ways to compete with digital photography.

When looking at current digital SLR and point and shoot digital cameras, both have a desired market: lower and mid end, reasonably priced cameras versus higher end consumer cameras & photographer professionals. Over the last few years, we have seen many of the digital cameras carrying basic attributes (LCD screen on the back) to distinguishing attribute (photo dock and printer capabilities for cameras). But the energizing attributes diminish quickly (very high resolution, high dynamic range *HDR*) as cameras continue to push the level of megapixels.

Wharton Chapter 6 - Assessing Future Markets for New Technologies

With new and emerging technologies, it is sometimes difficult to find a market or a customer to fit these technologies, the price they would be willing to pay, how they will use these technologies, or if the market will be accepting of these technologies. We can learn and understand markets by evaluating the relative size and supporting infrastructure for the new technology. There are three approaches that useful assessments of markets:

• Diffusion and Adoption - technologies diffuse in a market at different rates and some technologies are adopted early and some not at all. Determine the value of the new product relative to the best alternatives in the market but be mindful of barriers in the market that might affect acceptance. Be mindful of innovation and price of new technologies when evaluating markets. Analyze consumer behaviors and user requirements in a given market to determine possible adoption rates of the technology. There will be early and late adopters if the technology takes off in a given market.


• Exploration and Learning - informed anticipation by watching other exploration efforts to see how products and technologies have faired in the market and making anticipatory actions to capture opportunities. Analyze what you need to know about the market and intrepret the findings to determine market expectations and how to proceed.
Try not to assume too much about the market and the preferences associated with it.


• Triangulation for Insights - absorb uncertainty and anticipate opportunities. Start with diverse market research and analyze the approaches and findings from each of the research methods. Look for different approaches that ask similar questions -this typically yields patterns and a probably bias. Look to users that are pioneers in the market (much like wait and watch approach) and tend to lead the technology. Learning from their mistakes and approaches can help you succeed. Analyze markets for indirect evidence of market needs through looking at potential customers and ask customers about frustrations and needs to determine if the market is the right one to enter. Use modeling techniques to try and anticipate the possible level of adoption and integration into the market.

There are numerous technologies that have used this methodology to find new opportunistic markets for emerging technologies. Nanotechnology has applications in so many different markets that in some cases, it can apply to almost all markets. But, in order to implement. companies must find markets that will readily adopt this technology. The biomedical field has seen numerous nanotechnology-related products become adopted but will all humans accept nanotechnologies as part of their healthcare. Companies researching and implementing nanotechnology are carefully watching the market to see what their competitors are doing, how consumers are accepting and integrating nanotechnology into their lives, and the long term affects of this technology. Costs associated with nanotechnology in biomedicine (because of research) can be higher and not all patients will be willing to pay for these costs.

Wharton Chapter 5 - Public Policy and Lessons from the Internet

This chapter of the Wharton book discusses the role of government in emerging technologies and how they help/hinder this process. The chapter analyzes the events that occurred with the introduction and adoption of the internet and how the government handled these changes.

While the government has control to monitor, tax, and set policy to disrupt technologies, they also have the power to create technology infrastructure through institutional infrastructure and research infrastructure. The government can set standards and regulations on the technologies while also offering subsidies to help emerging technologies get started.

The government helped start the ARPA net in the late 1960’s for the Department of Defense. ARPA was stabilized and the NSFnet was born for the use of academic research. In 1990, ARPA was shutdown and moved to NSFnet. During this time, technology projects were nurtured and became a testbed for techhnology.

In the early 1990’s, the NSFnet changed due to three major developments:
· NSF net was no longer privatized and moved toward a for-profit model. NSF moved to pritized backbone and NSF no longer existed by 1995
· Protocols and standard for data to travel over the internet were invented and put into place by CERN. First web browser was built by NCSA for use on the WWW
· By the early 90’s, over 30% of US households owned a MAC or PC

Lessons from the Internet:
1. Government can play a powerful roles in shaping the development of a new technology in its earliest research stage (i.e. as seen in incubating this technology in ARPA and NFSnet)
2. Withdrawal of government support for a research effort is resisted by the beneficiaries as the effort gets closer to commercialization (subsidies disappear and universities, science labs, etc suffer)
3. Government can help manage the transition from public (educational institutions, research labs) to the private sector (commericialization) but everyone will complain. Government had trouble determining and regulating the information that should be available to the public sector (ie. hate or sexually explicit information).
4. Public concern about these new technologies on social mores and how the government should intervene to limit these impacts. These impacts including legal issues, intellectual property infringement, and national security must all be addressed by the government
5. Commercial and government interests will seek a government or legal response to disruptions caused by technology. These disruptions include cellular technology, broadband technology, and “hard” /”soft” networks. These entities want to know if these services are available to all, affordable to all, efficiently provided at a “reasonable quality”, and who is making all the money on these services (i.e. monopoly)
6. A new technology leads to demand universal service for all and the needs for governmental intervention. New regulations are set in place to provide a set quality of service on the technology (i.e. the cable companies outage example)
7. Dominant firms may treat customers poorly which leads to regulation. A monopoly can increase pricing structures on technology and lead to excess profits.
8. Regulation and Antitrust help prevent a single firm from gaining a “dominant market position” through a new technology. “Closed computing architecture” and vertical integration can all lead to an issue in public policy.
9. Technology leads to a firm’s dominance in a confined marketplace and there is need for political governance to prevent the firm from vertically integrating. The technologies can lead to a monopolistic approach in the market allowing a firm to push out the competition.
10. Regulations can have unintended side effects on emerging technology. Regulations can push competitors out of the market by creating unintentional barriers to entry.

These lessons when paired with the internet example truly show how an emerging technology can both grow and be stifled by governmental policy. Government policy can help emerging technologies become more widely accepted, integrated, and maintained through regulations and policies. These same policies can have a negative impact on the technologies as well (as see in Lesson 10).

The development of experimental pharmaceutical drugs may go through a similar process. The government gives subsidies to research institutions for developing drugs to cure the ailing people of the world. After the drugs become commercialized, regulation by the FDA is set in place to ensure the drugs are safe. The drugs are then allowed to be sold to other pharmaceutical companies as generics to prevent a monopoly in the marketplace.

Wharton Chapter 4 - Identification and Assessment of Emerging Technologies

The elements most important in this chapter pertain to the assessment and identification of emerging technologies in the marketplace. Companies should "choose technologies based on the understanding of market potential" to be successful. The R&D process uses a dynamic approach to help determine the risk and value of the technology and the potential lifecycle. The 4 assessment steps to emerging technology are:

• Scoping - scope and domain of the technology should be based on the firms capabilities + the opportunity and threats as a result of the technology. Scoping is the direction based on the companies core competencies.


• Searching - determine the sources and information to follow to determine feasibility and viability. This is usually done by looking internal to the company for new technologies, external companies such as universities and governments, and external literature such as Lexis Nexis and other trade publications. Look for strong signals-citations in publications and following the action of the firms competitors. Keeping track of this information is crucial when searching for emerging technologies.


• Evaluating - technology should be evaluated against the capabilities of the company and the needs of the target market. These technologies are ranked based on financial, risk, and other criteria to determine impact on the firm and the potential market.


• Committing - how the firm should choose to proceed with the technology. Before a company commits resources, time, and money into a technology, they typically follow four types of strategies -"watch and wait" to see how the technology evolves and see how the technology is implemented and perform a quick taker, "Position and Learn" to learn more about the technology and place the firm in a position to implement, "Sense and Follow" is when the company invests the money and chooses to implement, "Believe and Lead" the firm fully commits its resources.

The four step approach allows the firm to find the technology for the customers that will be sustainable in the market, gathers information about the technology by examing the competition and information from external publications, evaluates the data collected from the "searching" phase, and makes a recommendation on whether to fully commit and implement or wait and watch to see how things change in the market.

This approach has been used by Sony with the introduction of the mini disc player. Sony created a device that allowed consumers to listen to digital music on a tiny music player that was not succeptible to the same issues of carrying CD's. The mini discs were small, lightweight, and protected from accidental scratching due to the plastic encasement that covered the mini CD. The technology hit the markets and performed very well in Europe but struggled in the US markets. With competitors using small, large-capacity hard drives and flash memory, the mini discs could not compete in storage capacity. Mini discs also required proprietary disc drives to read the media outside of it's native player. But, the minidisc was the building block for the next generation of portable music players like the iPod with it's non-skip technology of buffering the music into temporary memory (http://www.minidisc.org/minidisc_faq.html)

Google Apps in the Enterprise

In reading the article, Google takes a more unorthodox approach to presenting it SaaS solution to enterprises. By focusing on making the enterprise apps simple and easy to use, they overlook the complex needs of many organizations. But, in googles defense, they are able to adapt and change quickly with the business environment.

The idea of dealing with chaos in the enterprise business environment baffles me. Google's approach is to just search to find things rather than organize them in a meaningful structure. For A type personalities and those that need this structure, this system will be difficult to adapt to. By organizing data, I think it is easier for humans to see relationships in data. By searching on random keywords, these relationships can get missed or be clouded from view.

Taking control from the organization will be a huge change for many. With "willy-nilly" realease schedules, or those schedules deemed by google, suddenly take control away from IT with regards to upgrades, maintenance, and downtime. And not having a choice on new feature sets will drive many organizations crazy!

A replacement for office you say? If organizations do simple word documents or excel sheets without anything fancy, I could understand this statement. A "lite" version may hit most users but Office 2007 can produce amazing business literature using fonts, formats, graphics, and templates. But, Office does not support collaboration of files (OneNote is the exception) whereas this is one great strength of Google apps. Google Apps has a long way to go if they are to complete with Microsoft as a replacement technology without being able to support all levels of users in an organization. But, for 1 year of development, Google is doing well.

The mobile office and working off-line are interesting concepts to consider. With the ability to work offline, users are free to work from wherever as long as they have an internet connection. Now if the organization loses their internet connection for a few hours, EVERY user must work offline. This is much more detrimental to an organization. And, like the article mentioned, reimbursing employees for internet can be quite costly.

The product strengths of GAPE are relevant and good selling points for Google. But, possible enterprise customers should really look into what GAPE will not do for the organization. With 99.9% uptime for email only, as a customer, this would make me nervous. If my business relies on these apps to do business, I would expect the same uptime for all applications. And the clause for "not responsible for lost data, profits, or revenue" would make me think twice. With my IT staff, I can at least ensure backups are performed at regular intervals. With Google, who knows!

Google does have one thing going for them- their name. Google is an innovative company that has branded itself as the new hightech king of the web. Google has partnerships that will allow the software to evolve quickly and fill in the holes where it's GAPE products are deficit. With their always new and innovative technologies, Google will allow GAPE to go in directions that Microsoft and other companies could only dream of.

The evaluation of a SaaS based framework was definately a good point. To compare apples to apples, organizations can evaluate SaaS products to see if they meet the business needs. A slow approach to the decisionmaking process and evaluating alternatives are a must before investing in a SaaS products. SaaS products can reduce the TCO for an organization by alleviating the headaches of maintenance and upgrades. Access to Googles API's and services like SSO are certainly good features that organizations should consider during the evaluation process.

Overall, an organization really needs to look at it's current infrastructure and business needs to see if Googles GAPE solution would work for them. Google's GAPE has great simple features that would cater to most business users but falls short in the richness and ability to cater to more complex needs and power users.

Wharton Chapter 3 - Technology Speciation

Technology speciation: The evolutionary differentiation of a pre-existing technology into one or more distinct technologies. The chapter discusses how existing technologies evolve to create
"new domain of application".

There are two critical features of speciation:

• "Speciation is not triggered by a transformation of the population within"
• "Speciation event allows the two populations of homogenous entities to grow quite distinct as a result of their now different selection environments"

Changes are not usually a result of revolutionary occurrances in the environment but more of a evolution over time. In the process, the technology is changed to adapt to a new environment. This new environment must have the resources to support the development of this change. As this technology grows, it may displace the older technologies. These new "lineages" of technologies may emerge as a result of combinging or "fusing" other technologies that are then synthesized or "converged". Sometimes, these technologies are not ready for a broad market and are isolated to a single purpose or "island of application".

The key is to find the right context or application for the emerging technology. Some of the key concepts when finding this application is

• view markets as being hetergeneous
• focus on market contexts and not the products that will fit into markets
• expand the criteria for the market as each company and case is different
• study users of the market
• "Learn by doing"
• Accelerate the evolution

There are numerous products that have come on the market that have gone through technology speciation. The PDA was a great technology but was expernsive and really catered to a small percentage of people. As the technology evolved, the PDA became the smartphone and the blackberry. Combining the functions of a mobile phone, calendaring, email, and the web, a new product emerged. Now, the iPhone builds on the the smartphone/blackberry by incorporating more multimedia features and improved use of it's GUI (through a touch screen).

I think the key element of this entire chapter is that new technology rarely just comes about one day. It's an evolution -sometimes slow but sometimes very quick, it just depends on the support structure and the resources of the environment in which it operates.