This Month's Spectrum Summary:

(The following is an excerpt from the January 2007 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2007)

2007: Time to Rework Business Models; but Watch Out!
It's the Toughest Kind of Innovation

This month we meet with Marco Boer and Patti Williams for an overview of issues that I.T. Strategies will address as we move through this new calendar year. Heaviest focus will be on the non-commoditized segment, especially industrial inkjet. Detailed projections are being researched to size specific application segments for the major technologies. Besides showing relative marketing targets, for the first time ever it shows digital printing now outpacing the analog market.

As change accelerates, it becomes ever more important to compress development cycles. One way is to compromise component performance, to make do with current off-the-shelf components. Another is to acquire capabilities by buying relevant companies. Over the past few years we have helped guide a number of successful acquisitions for clients.

Value chain analysis is a growing and ever more important specialty. It's easy to fall into the trap of equating sales volume to profitability. Kodak learned this the hard way with its digital camera program. Ink companies pressed by low margins have responded by moving up the value chain by introducing inkjet hardware. Many vendors are moving into services.

But moving up the value chain successfully means rethinking the business model, a more challenging level of innovation than product innovation. It means seeing our businesses as part of the much larger communications industry, not just printers. Making sure company infrastructure is appropriate to new time-to-money realities and market positioning is becoming ever more important. Part of this may involve analyzing potential demand. Decentralized printing changes your business model.

This year it's time to look more seriously at markets beyond print. The post-print world isn't imminent, but it's important to keep at least one eye on the evolution of potentially disruptive technologies such as digital signage.

R&D planning horizons differ quite a bit in various parts of the world. One factor is funding sources. Long horizon development is stronger in Europe and Japan because there are more government grants. In the U.S. funding is much more fragmented with the major source being the Department of Defense.

To close, Marco can't resist a brief promotional pitch, reminding us that in this era when there is ever more personnel turnover, institutional memory--a sense of what works and what doesn't--erodes. This means the kind of worldwide vision and long term experience that I.T. Strategies offers is needed more than ever.