Why We Haven’t Found the 21st Century Business Model
by Brian Timoney
With the extra reflection that comes with any new year, I’ve been pondering a peculiarity of the presumably exciting geospatial industry: no one likes their business model. Forget the giddy enthusiasm of 4-5 years ago, with the promised federal cutbacks at DoD/Homeland Security, along with the in-progress shrinking of state and local budgets, many shops are wondering how to keep treading water, let alone surf the wave of the next, ‘new’ thing. How to explain this dissonance between a “cool” technology becoming more mainstream and the disquiet of not knowing how to profit from it?
Even though the Internet specializes in amplifying Moral Outrage, I’ve been taken aback by the public relations backlash against Google for having the temerity to charge its heaviest users of Maps. Well, more like reassured, since if Google (and Bing) has trouble explaining its pricing structure, then those of us who sell web-based services are allowed to cut ourselves some slack:
Reason #1: No One Knows What Stuff Is Supposed to Cost on the Web
It’s been interesting to observe how the dominant vendor ESRI is playing their cloud-based offering. Since no one knows what things are supposed to cost on the web, using shrink-wrapped software analogs with which customers are already familiar helps…a lot. If you’re paying ‘x’ for an ArcServer license, then being able to do replicate the same end-user experiences using their online service for 60-70% of ‘x’ seems like a good deal. A pronounced advantage to be sure, but competing on pure web experience is a punishing game, and so it’s even more important to lock in customers by any means necessary (including prodigious amounts of marketing).
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There’s this upscale-ish farm-to-table place in my neighborhood where the wait-staff has been trained to regale first-time visitors with their ‘story’. I’m hungry, I’m ready to drop coin, and your story is delaying my eating experience. My enthusiasm has been converted to the singular wish that the wait-person just shut up right now. I think we in technology are too often like that wait-staff, excited to overwhelm our customers with technical minutiae that fails to address their fundamental needs…
Reason #2: We Like Technology and Read Obscure Blogs; Our Customers Like Beaches, Kids’ Soccer Games, & Napping (and Don’t Read Obscure Blogs)
As an enthusiastic user/promoter of open source software, effusively digging into minutiae and wondering about business models is second nature. Indeed, I recently received an email asking for advice on “open source business models” and my immediate thought was…I wish I had one. Luckily, someone much brighter than myself, Paul Ramsey, gave a great talk on this very topic at FOSS4G last year. While Paul does a great job unpacking the complicated relationship between price and value, and how those signals can sometimes get very crossed, let me add a more general observation…
Reason #3: We Get Excited by Free, Cutting-Edge Technology; the Words “Free” and “Cutting-Edge” Make Middle Managers Very, Very Nervous
A couple of weeks back 60 Minutes profiled Alex Honnold, a guy who “free-climbs” cliff faces without any kind of safety equipment. Brushing aside questions of safety and living with no margin for error, one was left aghast watching him calmly negotiate one life-threatening obstacle after another. Where he enthusiastically talked of future challenges, the viewer is unable to shake that this young man will meet a grisly, premature end.
Unfamiliar technology with unfamiliar licensing terms take many managers out of their comfort zone, without a safety net. Paradoxically, in a tough economy when their own positions are more tenuous, the appetite for anything resembling risk is minimal indeed. I know, the availability of source code is the ultimate safety net. Have you seen the average manager’s pupils dilate in fear and confusion the first time you show them GitHub?
But let’s not make the managerial class the target of our animus, but rather evaluate honestly whether we’re opting to spend too much time in the World-As-We-Wish-It-To-Be instead of the World-As-It-Is. Our clients and potential clients managed to stay in business before we showed up on their door step, so let’s temper the perma-sugar high of techno optimisim with a measure of old-fashioned humility.
In next week’s post I’ll discuss my best guess as to the key components of the still-elusive 21st Century Geospatial Business Model.