Tuesday, June 3, 2008

Old technologies’ last gasp

I found an interesting article by Daniel C. Snow from January 2008 Harvard Business Review. In his article “Beware of Old Technologies’ Last Gasp” he explains what are the reasons behind the phenomenon that it will take longer than expected before new technology will replace the old one and hence it will take longer than expected before the new technology companies will become profitable. I feel that in mobile business this problem is not as big as in some others, because mobility seldom replaces completely the old process. Mobility is both-and; not either-or. Another possibility is that mobility enables something that hasn’t been available before, therefore there’s nothing to replace.

First reason why old technologies survive longer than expected is that new solutions replace old ones first from market segments where the old technology was already poorly suited (“A retreat to defensible ground” as Snow puts it). This gives better position for old solutions to compete at segments where they are at their best. This gives a temporary improvement to their performance and delays the expansion of the new solution.

Second reason for the last gasp of old technology is that old solutions can learn something important from the new ones and sometimes even use parts of the new solution to gain quick improvements.

These observations are important for both parties: new players must prepare to wait a little bit longer before their business projections will become true and the old solution providers must not make the mistake that they believe the “last gasp” to be a sign of successful and sustainable improvement.



Anonymous said...

According to a June 13, 2008 Press Release Mr. Daniel C Snow is now on the Board of CPS Technologies Corporation. Might this be a sign that Mr. Snow feels this metal matrix composite company may (finally!) be ready to see big results? I hope so, because I do own the stock (Symbol=CPSH).

Harri Salminen said...


Let's hope he remembers his own studies and understands the factors behind company's success.