In today’s rapidly changing business environment companies that are averse to change or that do not keep up with changing technologies often fall behind. Falling behind may be become too overwhelming to catch up to other organizations that surpassed you in their efforts. The other issue of too little too late cannot make up for the lost market share and diminishing shareholder value by not meeting earning expectations.
The case of RIM where analysts have constantly downgraded their value and as a result plummeted their stock price, is the perfect example of not keeping up on the technology front. RIM has lost significant market share and continue to fall below expected sales projections.
By not keeping up with technology it is quite possible to be left behind, lose market share which impacts the bottom line. The decreased earnings of coming in below expectations leads to downgrades; consequently a lose in shareholder value as investors start to bail. A company must take a giant leap in the evolution to create a next generation technology, platform or application. In the case of RIM where they have introduced new hardware and a new OS with more updates to soon follow it may not be enough to recapture their once dominant position in the smart phone market.
Business changes fast in today’s world and if you don’t keep up you can miss the technology train. Companies that cannot keep up to rapidly changing market conditions are left in the dust and lose immense value from even just a year ago. RIM is still playing catch-up trying to regain market share. The case of HP buying Palm and not being able to parlay that into an OS or some kind of partnership agreement with another hardware maker cost them a minimum of $1.2 billion just for the purchase of Palm alone. Not being able to innovate or gambling in the wrong direction has hurt HP dearly with abandonment of Palm and their recent touchpad fiasco. Now they are looking to get out of the PC desktop game altogether. These companies HP and RIM have significantly decreased due to not being able to innovate or even hold onto current market share. As paraphrased from Eric Schmidt at Dreamforce 11 companies that care about their own software, platform and infrastructure sometimes miss the boat on technology as opposed to focusing on customer needs.
Since it looks that IP will now be the driving force to keep technology viable you can bet that more money will be thrown at R&D and buying other companies to that already have created new technology. It is often cheaper to buy another smaller company to incorporate into your fold than build the technology itself. By purchasing another company your technology can surpass others quickly by leaps and bounds as in the case of SFDC purchasing Radian 6 for their analytic prowess in social media monitoring space. The incorporation of adding social media monitoring to their CRM has increased value in this space significantly and even created a new type of solution – the social service cloud for the enterprise.
Apple has found the right mix – listen to the customer and keep customer service as the cornerstone of your organization and the money should follow. This is proven more often than not as in the case of Zappo’s where customer service was the focus; which ultimately lead to their success. In the case of KLM using Salesforce technology for social media is quickly differentiating them as a perceived premium air carrier. Customers tend to gravitate towards companies with customer centric policies and high satisfaction rates. Companies must innovate to keep up with their competitors or become obsolete very quickly.
Eval-Source is an Analyst/Consulting consulting firm that offers enterprise software evaluation for cloud and on-premise systems, cloud computing and social media consulting, business process optimization and technology planning for organizations. Our innovative professional services make your life easier whether it is to acquire enterprise software or provide you with fact–based information to match your business with IT. Eval-Source provides critical decision support to validate your technology investments using the Tru-Eval system. Follow our blog at www.eval-source.com/blog or on twitter @eval_source or our site http://www.eval-source.com