Cop­ing with Com­modi­ti­za­tion

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Tech­nol­ogy is in­creas­ingly be­com­ing a com­mod­ity due to an ever in­creas­ing de­mand for tech­no­log­i­cal prod­ucts, low bar­ri­ers to en­try and lower man­u­fac­tur­ing costs. There is no ques­tion that cloud com­put­ing, com­mod­ity so­lu­tions and open-source soft­ware have changed our per­cep­tions about the value of IT. Many, in fact, are con­vinced that in­for­ma­tion tech­nol­ogy is rapidly be­com­ing a stan­dard util­ity, much like the water and electricity that flows into our homes and busi­nesses. There­fore, there is much heated con­tro­versy about the strate­gic value of IT, as like water and electricity, it is no longer seen as a com­pet­i­tive dif­fer­en­tia­tor for com­pa­nies to have these ser­vices.

Any new dis­cov­ery would pro­vide them with a com­pet­i­tive ad­van­tage to stay ahead of other com­pa­nies for a long time. But over the years due to rapid de­mand of tech­nol­ogy it be­came eas­ier to du­pli­cate in­no­va­tions and look for short term ad­van­tages. More­over, the man­u­fac­turer’s decision to sup­port only the com­mod­ity is also over­haul­ing the tech­nol­ogy prod­ucts. As a mat­ter of fact, ex­perts have also ob­served that Mar­keters cre­ate com­mod­ity mar­kets. De­pend­ing on the de­sired spin a mar­ket­ing depart­ment can call the same tech­nol­ogy “tried and true” or “ag­ing tech­nol­ogy” thereby cre­at­ing or de­stroy­ing the prod­uct’s mar­ket.

Along with the ar­gu­ment over what sells a prod­uct which the mar­keters push, or is it the push­ing which sells it, it is also a com­mon fact now that ‘the best’ tech­nol­ogy is not nec­es­sar­ily a mar­ket­place sur­vivor.

While true in­no­va­tions de­serve ap­pro­pri­ate lev­els of com­pen­sa­tion, the law of di­min­ish­ing re­turns ap­plies to all things, es­pe­cially tech­nol­ogy. The price of a tech­no­log­i­cal prod­uct de­pends on where it is dur­ing its life­cy­cle; it drops rapidly as soon as it is com­modi­tized. As tech­nol­ogy gets com­modi­tized it is im­por­tant for com­pa­nies to try and dif­fer­en­ti­ate them­selves from the oth­ers.

At first in­no­va­tions are pro­pri­etary and of­fer sub­stan­tial ad­van­tage in the mar­ket for those who posses this tech­nol­ogy. But over time, this tech­nol­ogy be­comes more com­mon and stan­dard­ized, providers more plen­ti­ful, com­pe­ti­tion rises, and con­se­quently the value of that tech­nol­ogy be­comes in­signif­i­cant from a com­pet­i­tive per­spec­tive.

For in­stance, the tablet mar­ket, par­tic­u­larly pushed by the ar­rival of PC mak­ers and low cost man­u­fac­tur­ing has trans­formed into one dom­i­nated by com­mod­ity prod­ucts. “This could be­come the fastest­com­modi­tized mar­ket in his­tory,” was one of the com­ments at the Open Mo­bile Sum­mit. The ac­tual tablet hard­ware is mov­ing to com­mod­ity sta­tus so fast that it is go­ing to be prac­ti­cally im­pos­si­ble for any com­pany to es­tab­lish a last­ing dom­i­nant po­si­tion based on that.

Ap­ple un­der Steve Jobs strived hard to in­no­vate and came up with tablet com­put­ers; the ipad com­pletely rev­o­lu­tion­ized the tech­nol­ogy mar­ket. As far as tablet com­put­ers are con­cerned ipad took great ad­van­tage of be­ing the first launched prod­uct. Ap­ple has man­aged to es­cape the com­mod­ity vac­uum ar­guably by mak­ing their prod­ucts not about the tech­nol­ogy but about the whole user ex­pe­ri­ence they pro­vide. Other com­pa­nies like Sam­sung, Black­berry, HP now try to du­pli­cate the same tablet tech­nol­ogy, try­ing to stand out by dif­fer­en­ti­at­ing on minute de­tails and yet re­strict­ing them­selves to the same ba­sic de­sign. Even e-readers which tech­ni­cally were en­tirely dif­fer­ent prod­ucts are now try­ing to in­cor­po­rate tablet fea­tures; Ama­zons’s Kin­dle fire is one such ex­am­ple.

An­other ef­fect of ipads huge con­tin­u­ing suc­cess is that tablets are now also be­ing used as a mar­ket­ing com­mod­ity. They are the win­ning prizes in con­tests and are part of fre­quent give­aways.

Once tech­nolo­gies reach the com­mod­ity sta­tus their life­cy­cle be­comes re­stricted to a cer­tain ex­tent. There are a lot of units avail­able in the mar­ket bring­ing prices down; there is also a lot of com­pe­ti­tion forc­ing the com­pa­nies to evolve at a rapid pace. Hot elec­tronic items even­tu­ally hit rock bot­tom prices be­fore they be­come ir­rel­e­vant in the mar­ket. One such po­ten­tial fatal­ity is the e-reader. When this tech­nol­ogy was launched by Ama­zon, they were con­sid­ered rev­o­lu­tion­ary but now with the com­pe­ti­tion from ever cheaper tablet de­vices they are slowly dwin­dling out. Ini­tially e-readers were con­sumer de­vices but some com­pa­nies and gov­ern­ment en­ti­ties started to in­cor­po­rate them in as doc­u­ment dis­tri­bu­tion de­vices.

They were seen as tools lead­ing to a pa­per­less fu­ture, but this failed. Em­ploy­ees al­ready had lap­tops, tablets, smart­phones that got the job done. An e-reader ends up re­strict­ing the user and is not suit­able for of­fice use. Much of what hap­pened to e-readers in the con­sumer mar­ket will also hap­pen in or­ga­ni­za­tions, they can be sim­ply over run by tablets. Thus, IT or­ga­ni­za­tions need to con­stantly evolve for pro­tect­ing their tech­nol­ogy in­vest­ment in this age of com­modi­ti­za­tion

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