Colin Brown, Managing Director, Tesseract takes a look at the difference between functionality and technology and why technologies must learn to adapt and evolve if they are to continue to thrive...

In all product development, especially where technology is involved, there is always a compromise between functionality and technology. And once a product has been developed, this compromise is even more apparent; the technology moves on but the product becomes frozen in time.

This can be seen with consumer household appliances, like televisions and radios, reducing their power usage, becoming smaller, lighter and even internet enabled. Cars, which are now more fuel efficient and have built-in wifi, are another good example.

Companies are forced to upgrade their products to use the latest technology at great expense or they will be left behind and commercially restricted. Here are some prime examples:

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• Kodak refused to move to a new technology, digital, which enabled pictures to be moved and edited electronically. They had made all their money from traditional film and could not come up with a digital plan.
• Word Perfect, the green screen word processor who did not move to windows until it was too late, allowing Microsoft Word to become the new standard for word processing software. With Word for Windows, true character sets could be displayed, black font on white background, on a PC using the new graphical user interface (gui), something Word Perfect using Dos found impossible. The new Windows GUI was pixel based and not character based so the display possibilities were infinite.
• Microsoft has stuck to Windows and Office being client based software (which makes most of Microsoft's profit) as opposed to web/browser based (almost a Kodak moment). Although, at last, they have released an iPad version of the Office suite.[/unordered_list]

These are just a few examples of technology that is in market demand overtaking product functionality. All of these examples are from companies who invented their products, were ground breaking at their inception but became frozen in time.

It is understandably hard for companies to keep pace with technology. Key personnel, including decision makers, feel comfortable with their existing product. They may have been involved in its creation, and have no understanding or intention of moving out of their comfort zone. I think Nokia and Blackberry are notable candidates;

Nokia at one time had over 70% of the world market of mobile phones, mainly due to their "easy to use" character based operating system and Blackberry was the business choice with its secure push email technology but both were overtaken by the Apple iPhone. Why? Because of its "easy to use GUI" (ring any bells?) and push email technology became widely available.

Companies/people seem to think that their importance is the functionality. At Tesseract, when we moved from green screen dos to windows, and used a different programming language, all of my developers left over a 6 month period.

Despite the fact they went on training courses for the new language. They must have felt their value was in their knowledge of the programming language or the existing technology rather than their knowledge of service management.

Life at the top is short lived. Sony, after setting the world alight with the walkman, have now become a dinosaur and are downsizing, even closing down their TV business. IBM, once the giant of the IT world and the size of their 6 nearest competitors combined, are no longer so significant...and it looks like Microsoft will follow.

Aside from companies not being willing to leave their comfort zone, another reason for not embracing technology is financial. They have honed their production, manufacturing and licensing and know the market very well.

Their business is a well oiled machine that produces results that can be forecasted to their shareholders (those bad guys). Moving to new technology is an expense risk so why bother? Just glue on some new bits onto the old product to make it look good. The problem is that when technology moves on, by the time it impacts on your business then it is already too late. The only answer is to buy one of the new guys.

The last pertinent reason for not moving with technology is a fear of failure. When a company first developed their product, they were brave in a brave new world and had nothing to lose. They fought their way to the top, beat the opposition and became very successful. Doing that a second time is very scary, they have a lot to lose. They are used to being number one and by moving to a new technology, they will have to fight with new guys on the block to regain that top position. It seems unnecessary when the business appears to be doing ok for the moment.

Apple has been rather smart in re-inventing themselves, effectively moving sideways. Although their products are technology-led, their breadth is quite amazing, each product built upon the previous. They are a modern day Sony, coming up with a new portable music device, the iPod, an accompanying online shop, a user friendly phone and a modern tablet. Although now with the loss of Steve Jobs, things have slowed down.

It does appear that in most cases, new technology is customer driven but not customer demanded, customers really don’t know what they want! They can advise on product evolution(focus groups, surveys etc.) but not revolution, digital cameras & iPhones are prime examples. New technology means a leap forward, an act of faith.

So this implies that product and service companies need to have young bright people who will either try to develop products or services to compete with their company’s current portfolio or look out there for badly executed products or services that can be improved on. Both of these processes must be continued infinitem.