"When men are easy in their circumstances, they are naturally enemies to innovations." - Joseph AddisonI had a lunch with a rather fresh ICT transaction boutique. A small niche player targeted for the ICT industry in strategic turnarounds and usually as a result also in transactions. Obviously this is the right time to do such things. Almost all the players are suffering with profitability or should I say with their survival. However, I started to wonder whether there is enough business left nowadays. Not just that many companies are done already but also because the whole industry has changed or vanished.
I have started to consider the traditional software business as an established and a mature state industry. Obviously there is still plenty of new startups but those are in some verticals not in horizontal markets. Old players are coming down to squeeze more pennies to their coffins from SME market that has been the safe bet for smaller growth companies. Microsoft, SAP, Oracle have done it. You just name the rest.
Mobile industry has lost its momentum for innovative and small companies. Big players are ruling the game and have shared the ecosystem among them. Operators and wireless device manufacturers are the major players in the market and dictating the pace and amount of innovation adopted by the consumer market. Innovative companies cannot tap easily into the revenue stream protected by operators.
Wireless industry has risen dramatically in the last few years, especially in the US. However it's still hard to see how one can make money out of Wi-Fi. The most obvious business is to sell the devices and hardware but beyond that. The integration and roaming between hot spots and mobile networks are negligble. This hinders the development of the service layer where the real innovation and small startups can blossom. Standards are coming gradually and meanwhile 3G networks are coming up. In the mobile side the service sector is developing gradually and my prediction is that most of the current infrastructure and models will be replicated for Wi-FI networks as well. The end user could not care less about the network access method under neath as long as there is enough bandwith.
Posted at May 5, 2003 04:15 PM