There’s no recipe for success at the bleeding edge, not for any company in the channel or outside. (123RF.com)The risk of bleeding edge technology depends on your expectations and partners.
At a recent technology event, a solution provider mused casually to me about the cost of the HoloLens, Microsoft’s augmented reality (AR) product. “Once you take on the cost of the development kit, shipping it here and paying duties, it was starting to go beyond R70 000!”
He was obviously disappointed at not getting to ‘play’ with such cutting-edge kit. Play is the operative word however, because it’s not the frivolous type that wastes company resources. Yet even the most adventurous financial decision-maker would find it hard to agree to R70k for untested technology. On the other hand, AR can change a business: imagine it being used by architects, call centre staff or field technicians. If you’re a supplier to such industries, AR knowledge could be a huge competitive boost.
This is the catch of bleeding edge technologies. Some say it’s called ‘bleeding’, since often that’s what the tech does: bleed your resources. You can’t easily justify a return on investment, because bleeding edge technology is often at least one of three things: not market tested, without a business case, or just plain volatile. Adopt it too early and it can drain your reserves. Adopt it too late and you’re just playing catch-up.
Embracing experimentation
Fortunately not all approaches to bleeding edge tech requires importing exotic hardware. Rogan Moore, Britehouse group CTO, prefers a broader definition of the concept: “Sometimes bleeding edge is using established principle technology for new technology application. You apply existing technology in a different recipe mix for a business challenge. We’re seeing quite a lot of this in bimodal scenarios: through an experimentation approach, companies discover new insights which used to be blind spots.”
He referred to the trend of companies relying on software platforms to help grow their businesses. A simple example is machine learning: a company may have troves of internal data, but no idea what to do with it. Machine learning (ML) – also known as ‘thin AI’ – can exploit that data, but the results won’t be clear until the company opens that door. So time and resources are spent on building an ML ecosystem. Nobody can promise what it will deliver, nor how it could impact the business. Time and an appetite for risk determine that. It could lead to a write-off – an expensive one as significant investment is required. It could also go the other way: some companies are already appointing ML systems as members of their boards. Seriously.
“We’re in a scenario now where customers are saying: ‘I have to utilise the technology in a new way. I have to modernise in order to stay competitive.’” says Stefan Diedericks, alliances and channel director at Oracle South Africa. “The interesting thing right now about bleeding edge technologies is that it’s not just confined to the technology itself, but also the very reasons why the technology is being used in the first place.”
The risks of bleeding edge are simple, but titanic. One is over-investment, particularly placing big bets on a technology delivering for the company’s future. Data loss and security problems are also common concerns, particularly in today’s highly integrated business environments.
This is an area where service providers can play a big role, especially if they host cloud environments. Companies look to providers to test new innovations and provide sandbox environments where experiments can be done at low risk. This does not free customers from cultivating innovation culture and funding, but it does take the edge off a little. As technologies grow in pace and complexity, service providers and vendors will be the go-to agents to help determine a bleeding edge technology’s viability.
New technologies can grow out of pre-existing business cases. "Marketing agency Red September started offering virtual reality experiences when it was approached by a large hotel client to produce differentiating content for the chain. Though the company had been dabbling with VR, this helped switch gears, says Quinton Grobler, head of digital at Red September. "It was valuable to go from a business case and then step back to gain all the components and build a VR ecosystem. That's where we saw all the opportunities in the becoming a major player in that space."
Building a market
In this case, the shift was not as taxing. Red September found it could elevate existing skillsets, such as traditional video editing, to adapt to VR's requirements. What required more focus was building the actual business. VR is a useful addition to Red September's toolbox, but enabling it to stand on its own takes focus and time. Realising the commercial potential of a new technology is often the more challenging aspect of early adoption.
Growing a technology organically out of an existing business model is the ideal. But not all bleeding edge tech is as patient. Some adopters want to get closer to the fire, sitting alongside people who stoke it. In that event, companies ought to look for trailblazers to partner with, such as incubators.
The incubator route But for some, using the safer environments offered by service providers and vendors doesn’t scratch their itch. They might want to get closer to the fire, sitting alongside the people who stoke it. In this case, incubators are a good place to find the right partners.
Valerie Fox is a huge advocate of this approach: “No matter what size company or organisation you’re in, you’re always only as good as the people you have. There are always other creative, more innovative ideas out there to give another solution or perspective. Incubators, for the most part, and as they mature, get an eye for exceptional teams and innovative solutions. I believe the best thing a company can do is to check in and be involved in what's being incubated.”
Fox, chief innovation consultant at The Pivotal Point, is an incubator evangelist and helped establish the Tshimologong Precinct innovation hub in Johannesburg. She actively promotes incubator spaces not just for the sake of product development, but to breed innovation culture.
Incubators are often ignored, because they’re associated with high risk and not a clear focus on business outcomes. This is a problem with some incubators, but not all of them. In fact, successful incubators take a problem-solving view from the start, instead of inventing a hammer yearning for a nail. Companies should look for that value, but must also interrogate if they themselves do the same.
“Disruption as an end goal is flimsy. Solving real problems and challenges should be the number one goal and disruption could come from that, if the solution starts that ball rolling,” Fox says.
Another tactic is to keep your head among developments. Red September holds weekly innovation sessions where everyone looks at new developments and if they have potential uses. Says Grobler: "That keeps us on our toes. It keeps you up to date and you don't get caught by surprise."
There’s no recipe for success at the bleeding edge, not for any company in the channel or outside. It begins with a culture of experimentation and understanding business needs. Simply put: what do you need, what are you willing to do to get it and how resilient are you to failure? The right partners can help absorb risk, but it all starts with your business.