Sunday, January 08, 2006

Device integration -- the NY Times perspective

The Saturday, January 7, 2005 issue of the NY Times had an editorial entitled "Working Together for the Average Joe", which laments the difficulty of getting consumer electronic devices to work together. They even lament that:

Computer owners have to become security experts, network specialists and troubleshooters.


... the reality is a Babel of devices and technical-support staffs that blame other companies and don't help.

Alas, there is little hope in sight, for the short run.

For one thing, there simply isn't any financial incentive for technology vendors to do so.

For another, the present morass is to some degree a result of the facts that the management structures at most companies and the people who occupy those management "slots" simply don't have a clue how to solve the problems. Their jobs are to design and produce devices, and the integration stuff is for the most part a distraction. That's not the way I would structure a business, I'm simply reflecting on the reality.

My solution to the problem in my own life is to simply refuse to use technology that doesn't work together in a way that I find acceptable. Granted, that means I have fewer devices, but I also have fewer problems. I don't have a cell-phone, page, TV, VCR, music palyer, etc. I have  a PC and a Sony Palm-compatible PDA that does connect nicely to the PC, so I have none of these integration problems to complain about as far as devices.

The bottom line for the NY Times case is that they are unable to establish the existence of a significant financial incentive. They mention an estimate of $3.8 billion in annual lost sales for overall consumer electronics spending of $126 billion. That's only a loss of 3%. That's next to nothing, and shouldn't be a reason for any technology executive to lose any sleep. Put another way, if you take in 97% of potential revenue, you are doing very, very, very well indeed. They quote a potential loss of $13 billion by 2010, but don't give a total revenue projection. If we assume 10% growth a year, that would be about $203 billion total revenue, for a loss of 6% which is still a rather small number and means that in the year 2010, these companies would be taking in 94% of their potential revenue, and without the expense and distraction of worrying about an extra level of device integration that the NY Times opines about.

So, in other words, the NY Times editorial essential tells us that there is little financial incentive for the plethora of vendors to get their plethora of products to work together.

Now, I would expect that the technology developers will end up improving usability and integration a bit every year anyway, even without the NY Times opining about it, so the likely loss in 2010 will be even less.

The real bottom line is that vendors will work towards integration whenever it seems to make sense and is cost effective from their own perspectives, regardless of what the NY Times or some market research group says. If the executives at the electronics companies see a clear and compelling business justification for device integration, they'll pursue it.

Now, if companies really do want to improve integration, all they need to do is retain consultants such as myself who do understand how and when to pusrsue integration. My inbox still isn't beeping at me, so I guess they are still not interested, despite the high-profile plea from the NY Times.

-- Jack Krupansky


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