Are There Barbarians at the Industry’s Gate?

Published: 2014-01-22

Unless you have been on a hermit retreat over the last few weeks, the stories of Microsoft coming to InfoComm (as a platinum exhibitor, no less) and Google buying Nest have caused quite a stir. There has been a significant amount of press and commentary raft with innumerable theories and pronouncements on how these companies will play out in the industry.

Barbarians at the gate?

There is a bigger change lurking underneath it all, a change which is already altering the fundamentals of the CE industry and now may be coming to the integration market.

In the short term we should not expect a “barbarians at the gates” scenario. Any feared/desired shift in the paradigm is a few years off yet and depends wholly on whether or not these two behemoths can actually get their act together. Let’s be honest, neither has had a very good track record in building hardware.

But do they need to be?

Making hardware is, well, hard. Ask any manufacturer and you will learn in fairly quick order the margins on a product are slim. Unless the production numbers are in the millions, the return on investment can be a long time coming. This need to squeeze every last profit pushes companies to extend the life of a line of products even when the architecture around it has completely changed.

The demand is for nimble and turnkey units which can respond to emerging technologies and the fickle finger of consumer desire. Traditional hardware development cannot compete and, in the eyes of many, should not be the goal.

Where is the innovation and profit? Inside sir, inside.

Many in the venture capital sector who specialize in fostering technology startups eschew companies who focus on developing hardware, often requesting they drop the box and focus on the delivery of services and interface. The integration community will soon see a host of offerings where established industry manufacturer’s OS are the engine of a device they did not make.

Hardware is becoming disposable with a lifespan that can often be measured in fiscal quarters. What will the system of the, near, future run on? The rise of soft tools have begun to create a universality and with it an expected, interoperability and accessibility to the internal workings.

One only has to look to the remarkable rise in popularity and project complexity of single board computers and microcontrollers. The movement is not just among hardcore techies, it has achieved a broad base interest across a demographic swath from student to seniors. The hardware is simple, connectable and inexpensive because it is not the point; it is an end to a means.

Make it your own, not DIY

Whether offered as a turnkey package or assemble as you go, the era of click, click, connect the bricks systems are here.

It has been argued that today, everyone must know a little code to succeed, if at minimum how to copy and paste components together to enable a function. While this, as a truism, is not yet ubiquitous we are well on our way to the new literacy.

Resistance to this notion is, as they like to say on Wall Street, working its way out of the system as the suites become simpler and those who do not do age out. This is not DIY versus custom integration. Rather, we are witnessing the rise of make it your own. We are growing from comfort with the interface to confidence in customizing and the expectation of deep control over a device operation.

Brand loyalty is dead, long live loyalty

If all roads lead to the demanded interoperability, then it stands to reason brands and customer loyalty to them will diminish. What Microsoft and Google would hope to gain is the hearts and minds of the mass midmarket client. While initially this could generate interest, they are setting themselves up for the great undoing.

While Apple may have fostered a cult-like following, it has been faltering as of late. Microsoft may attempt to follow with a proprietary network of devices, but this will be against the demand of the public. Loyalty will belong to those who can provide the services.

Many in the custom integration world will see this as a prime example of convenience or death culture catering to the lowest common denominator. There is some truth to this criticism, but it is unclear if decrying weak interface design and lauding the benefits of a properly constructed infrastructure will sway the rivers course.

Loyalty will be had by those who can integrate the work-home-in between into one flexible and secure offering. Will this latest invasion of CES into integration change us completely or provide a few lessons to grow on as it finally retreats from empire building?


Posted in: Insights, News

Tagged with: Apple, Google, InfoComm, Microsoft

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