Today's theme is "Focus".


Question: What stage of the technology adoption cycle is videoconferencing
    technology currently in?  What would be the best strategy for a company
    selling videoconferencing equipment to use to drive the technology and
    marketplace to the next stage of the cycle?

First one comment on the article: disruptive technologies go from niche
to niche.  This is a complimentary view that says you need to focus on which
niche you're attacking next.

Videoconferencing is stalled at the "Visionary" stage.  The technology is there;
The techies were using cuseeme five years ago, and now anybody can stream
realvideo or mp4 over the internet.  But it's a little more complicated than
just finding investors and commercializing it: nobody will actually invest
money in a market Microsoft's already in, and there's "Microsoft Netmeeting"
waiting to squash anybody who actually figures out how to profit from it.
Meanwhile, the open source guys are worried about patents
(see http://www.videolan.org/).

There are actually two distinct technologies which don't interoperate yet.
Internet based TCP/IP streaming video, and 3G wireless phones with built-in
cameras.  The phone makers are quite happy to sell the hardware straight to
individuals, since as long as you're carrying around an orwellian tracking
device anyway, it might as well have a spy camera in it.  Video cell phones
are likely to flood the market even if people only use them to take snapshots,
and once it's widely distributed the younger generation will make use of it.

Obviously the paper would suggest bundling together a specific solution for
specific customers, but that's already there. The pornography industry
has been an early adopter of all sorts of technologies, including videotape
and daugerotype photographs.  The BBC wrote about them using video streaming:

http://news.bbc.co.uk/1/hi/technology/2992914.stm

I think what's more likely to happen to get it into business use is that one
of the open source packages will be adapted for in-house use somewhere
like IBM, and cleaned up for internal use directly by a customer who knows
what they want.  Then that technology may be adopted elsewhere the way Cisco's
home-grown linux based printing system paved the way for CUPS and LPRng.

http://www.linuxjournal.com/article.php?sid=2907

The principle is the same, though: adapting technology to a specific niche.
One such potential niche is security systems; the 8 zillion hidden video
cameras that security guards monitor.  Another potential niche is fast food
order windows, actually letting you see a human on the drive-through screen.
But for most potential niches, videoconferencing turns out not to buy you
anything beyond a warm fuzzy feeling.  Speech goes just fine over the
telephone, the ability to see the other person conveys very little additional
information while taking up a lot more attention.  Still, corporate boardrooms
might want it for psychological reasons, with the proper marketing.

The more interesting applications of video streaming (so far) have been
broadcasting canned video streams, but the MPAA is just as reactionary as
the RIAA, and has been trying very hard to suppress this technology, since
it renders them irrelevant as well.  Buggy whip manufacturers again.

Question: Is Treacy's analysis appropriate for technology companies?
   Why or why not?

I'm not sure Treacy's analysis is appropriate to any company.  Why would
printing your bill on both sides of the page not fall under being
cost-conscious?  What does the smell of bread in costco have to do with
operational efficiency?  He's shoehorning stuff into his categories
left and right.

His basic idea seems to be that a company can excel in inventory management,
product development, or customer relationships, but not more than one.  (I'd
bring up Home Depot as a counter-example, although now that its founders
Bernie and Arthur have retired, it's degrading rapidly if you ask me.)

I wrote about companies like Dell, Home Depot, and Wal-Mart back at The
Motley Fool.  Our portfolio was called the "cash king portfolio", focusing
on dominant companies with high margins and large cash reserves, and
I was interested in companies that optimized the cash conversion cycle
instead, basically excelling in inventory management.  Treacy points to
Home Depot as an example of excellent customer service, yet I always saw
their real strength as inventory management.  They're the wal-mart of
hardware stores (a niche known for being tolerant of inventory since what
they sell has a multi-year shelf life, yet they focus on moving it rapidly
anyway).  Home Depot's basic idea was that if you let customers into the
warehouse, you don't need a seperate warehouse and retail site.  This
cuts a stage out of the inventory management chain.  On top of that, they
hold how-to seminars and hire extra staff who are instructed to walk you
to your destination rather than just give you directions.  Initially, they
did _both_ better than their competition.

So basically, I think the guy's full of it.