What's behind the Consumerization of IT?

The IT industry has a new favorite buzzword: Consumerization. According to this concept, more and more innovation in the IT sector is driven by the consumer market, not by enterprise customers.

It's not something that just a few entrepreneurs and VCs have made up. Even the analysts at Gartner -- the high priests of enterprise IT -- acknowledge the trend and encourage CIOs to experiment with consumer IT products. The shift to hardware and software originating in the consumer space, Gartner says, can't be stopped anyway. And many VCs now ignore the enterprise sector outright and invest only in consumer plays.

So who are these consumer, anyway?

Like most buzzwords, consumerization of IT is quite an oversimplification as a concept. It suggests that there is a completely separate world of non-professional IT users that have completely separate needs. As we all know, that's not the case. Most consumers are people who use IT every day at work. They have come to expect a high level of reliability and functionality from IT products, and that doesn't change as soon as they go home after work. But at the same time, they expect the stuff that they use at home to be more fun, easier to set up and simpler to use. Is it surprising that this in turn influences the expectations that they have about enterprise IT?

What's more, many trends in the so-called consumer space are actually driven by people who use IT for professional purposes, but outside of traditional enterprise structures: freelancers, writers, creative professionals, startup employees. For instance, many of the supposedly consumer-oriented Web 2.0 software products and hardware accessories are actually used by this type of user. They don't have access to cheap IT support and don't want to spend a lot of money, so simplicity is key.

So, maybe the consumer space really should be defined as "people using IT in the absence of an IT department".

The center of digital life

What was a home computer good for 15 years ago? Not much, maybe a bit of word-processing and some bookkeeping, a bit of education and some simple games. The most adventurous users would maybe connect a modem and dial in to some bulletin board systems.

How times have changed. The home PC now is a communications center (when was it that everybody started to use e-mail?), the gateway to the world and its information. It's rapidly becoming the main source for media content and news. It's the thing that we use to organize our pictures and our music, edit our home movies and express ourselves creatively in many other ways. And it's a fantastic game console.

Typical home computers used to be at the lowest end of the PC market, just barely powerful enough to handle some basic computing tasks. Now go to Dell's web site and look at the gaming machines. They are far more powerful than all but the most expensive corporate server machines. And all this power actually makes sense for games and digital media applications.

That's one main reason for customerization: The corporate desktop PC simply has run out of applications that need more power. How much more speed do you need to write some Word documents or run the ERP client software? Not so in the digital home: Every increase in CPU and graphics speed is very noticeable for today's home computer applications, so home computers drive innovation.

Make it simple, stupid

Corporate IT departments are not the best advocates of simplicity. And why should they be? After all, if IT people want to keep their jobs, it doesn't hurt that users need a lot of support and that there are glitches to repair. Management asks for progress and efficient processes, so IT rolls out more and more features on ever more expensive infrastructure. And IT vendors are of course happy to help. Who cares that users don't want and need all this complexity and will never use this expensive stuff?

But it doesn't work like that in the consumer market, where people spend their own money and their own time on technology.

I recently bought a Mac Mini, maybe the prototypical consumer computer in today's market. I was shocked. It just worked. It didn't waste my time with endless installation routines, virus checks and driver downloads. When I connected my printer, it did nothing. Or to be exact, it just installed it in the background, without bothering me. Again, it just worked. Not like my PC (that runs the operating system with a "Professional" in its name) where the same process would have cost me at least ten minutes.

The same experience is typical for many of the best Web 2.0 applications. They give you good functionality without the overhead of traditional desktop applications. They are instantly available and do not require any training. Of course, they are by no means perfect. But they're simple, easy to use, and cheap or free. They're an elegant solution to a well-defined problem and not more than that. But also not less.

What's in it for everybody?

Antoine de Saint-Exupéry once said: „Technology always develops from the primitive via the complicated to the simple."

Few people would disagree that traditional enterprise IT is complicated. And expensive. And unnecessarily complex. Sure, it tries to solve complex problems. But is that always the most effective thing to do? Maybe it would be more rational to first solve the simpler problems in a more cost-effective and user-friendly way. Of course, IT professionals are perfectionists. But they tend to optimize the wrong dimensions. Consumers behave differently, because they are willing to forgo functional perfection in exchange for simplicity and cost-effectiveness.

Could consumerization be the big step to a new era of simple, elegant IT? That's absolutely possible. It's not surprising that this trend is driven by consumers that are savvy (because they are at the same time experienced professional users of IT) but are also not willing to put up with high costs and complexity in their private lives.

Who will be the winners? Well, consumers, obviously, and the companies that build the best products for them. But achieving real simplicity is very hard, and there are some very complex things behind every simple user interface. Just look at Google's infrastructure or Apple's iPod business model. Those that can handle this complexity and hide it behind a pretty facade will be the biggest winners, both in the open market and in the world of enterprise IT.

Comments

[Sambasiva]

Hi

Great and very concise post with good points.

The most i liked is about the functional perfection that most companies "project" in their products. I think many of the features in IT/ITES / Telecommunications products that companies develop are loaded with features that are not of any use to many consumers. MS Office, Cell phones are great examples. I have heard many people whom i know say that in their careers till this moment, they must have used 20% of the product's features 95% of the time. Their usage patterns, needs are such that they need not require the additional features...they need not pay for these as well...and i think this is a sort of rip-off that most consumers have no control...

OFcourse, there are going to be exceptions when you need that exceptional, additional product feature but i don't think it is good on behalf of companies to charge the consumer for all the time he does not use those features..there's ought to be a way...and i think "consumerization", "SaaS (Software as a service) are allowing consumers to draw even better value...i think businesses need to re-orient themselves and provide customers with great value.

On a different note, i wanted to make contact with you and seek some advice. I'm an applicant for the SLOAN FELLOWS program at MIT THIS YEAR.

Could you please send me an e-mail so i can benefit from your application experience ?

Thanks in advance
Sambasiva