Consumerization

Consumerization[1] is a stable neologism that describes the trend for technology companies to bring new technology to the consumer market ahead of business markets.[2] Resulting in a switch of technology power from the work place to the home. Most employees are now finding that their home based IT is more capable than that provided in their workplace. The term popularized by John Taylor and Douglas Neal of CSC's Leading Edge Forum is one of the transforming drivers of Web 2.0

Understanding the consumerization process.

Consumerization is the process in which products and services are embraced by society in general. The result is ‘consumerized products’ and ‘public infrastructure.’ As Figure 1 shows, consumerization flows from two sources: the traditional private infrastructure of businesses, and the activities of early adopters in the consumer market. It emerged as an important phenomenon in the mid-80s when VCRs and facsimile (fax) machines were consumerized. Like other examples including data networks, calculators and the PC, they had their beginnings as expensive private infrastructure that was only available to businesses. In the early days of calculators and PCs, their use was restricted to only those with pressing needs, and even they sometimes had to share. By contrast, PDAs, CD-ROMs, DVDs and instant messaging all had their roots in consumer markets. Some technologies – for example, email and cell phones – followed parallel paths in both arenas. In all of these examples, society in general found value in the technologies and embraced them, creating economies of scale that businesses alone could never have achieved, as well as standards, quality, and convergence. Businesses may be surprised that in some consumerized markets they are viewed by the vendors as just small niche markets.

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Figure 1 – The process of Consumerization pulls from both private infrastructure and early adopters. It produces both consumerized products and public infrastructure services that rival private infrastructure

Historically, businesses – and particularly large enterprises – have held the view that information technologies were private infrastructure, to be owned and used by the business, not people. Even today, many businesses are more comfortable with traditional sourcing through private infrastructure markets, than the sourcing alternatives that have emerged as a result of consumerization. Consumerization delivers economies of scale but it also shapes the technology to the needs of consumers, because they become the primary market. This can create a psychological barrier to businesses, preventing them from taking advantage of consumerized products and public infrastructure. There is a tendency for the business to view these products and services as mere ‘toys’ used by consumers. They may express serious concern about the quality, availability, robustness or capability of consumerized products. Such concerns are legitimate but in most cases are justified only during the early stages of consumerization.

The truth is that consumerization establishes norms in the overall environment that are just as relevant to business as to anyone else. For example, some believe that consumer services are unreliable. In fact, many are more reliable than their business counterparts. Yahoo, for example, would be out of business if its services were unreliable, and it is a recognized leader in dealing effectively with spam. Yahoo’s email supports over 250 million accounts – a scale that dwarfs even the largest enterprises. The needs of consumers for reliability, security, cost effectiveness and interoperability are the same needs that enterprises have. The process of successful consumerization produces exactly the characteristics that enterprises are looking for. What is needed is a mechanism that routinely tests whether these concerns are still valid and whether the principles adopted in the past still serve the best interests of the organization. The scanning activity (step 2) and the ‘test pilot’ activity (step 5) described below are excellent ways to address these concerns.

There is an old saying regarding the evolution of innovative technologies: first, they are a joke, then they are a threat, and finally they are obvious. Part of the art of scanning is to detect emerging technologies while they are still a joke but have the potential to become a threat (to existing mainstream solutions) and to begin monitoring them. If they appear to be maturing successfully, eventually they become candidates for experimentation. The beauty of consumerized products and public infrastructure is that the investment in experimentation is usually very small. But this is not the only benefit. The real benefit comes when the organization exploits public infrastructure in an operational sense, and reaps the increasing benefits of standardization, vast economies of scale, and ‘dial-tone’ reliability.

References

1. David Moschella, Douglas Neal, Piet Opperman, and John Taylor “The ‘Consumerization’ of Information Technology” Leading Edge Forum June 2004 http://lef.csc.com/foundation/library/publicationdetail02.asp?aID=1950&ptID=2007 "The ‘consumerization’ of information technology is a powerful trend that promises many significant long-term business consequences, including radically lower costs, greatly improved functionality, and successive generations of users who are ever more technology-savvy.”
2. Gartner Analysts “Gartner Says Consumerization Will Be Most Significant Trend Affecting IT During Next 10 Years” Gartner October 2005 http://www.gartner.com/press_releases/asset_138285_11.html “ The growing practice of introducing new technologies into consumer markets prior to industrial markets will be the most significant trend affecting information technology (IT) during the next 10 years”

External links

• Leading Edge Forum on Consumerization