Changes In The Media Explain Why The Smart Computing Revolution Is Not Yet Running On Internet Time

This past weekend, my wife wanted desperately to attend Jon Stewart’s “Rally to Restore Sanity and/or Fear,” to support the message of civility and moderation. An injured foot and problems with travel logistics kept her from attending, but we watched it on the Comedy Central network. It was, of course, a counterpoint to the “Restoring Honor” rally that Fox News’ Glen Beck held in August. However, there were two striking commonalities about the two rallies:

  • First, the ability of cable program show hosts to gather hundreds of thousands of people (estimates seem to be around 100,000 for the Beck rally and 200,000 for the Stewart rally) to travel to Washington for a rally. We’re not talking about rallies organized by a major political leader like President Obama or a media giant like Walter Cronkite with a TV audience of tens of millions of people. Instead, the TV personalities who hosted these events have cable audiences that on a good night may reach 3 to 5 million people.
  • Second, the absence of attention to substantive economic issues facing this country, such as persistent high unemployment, economic recovery strategies, education and competitiveness, global warming, or budget deficits and priorities. Instead, the rallies focused on culture, tone, and attitudes, with the Beck rally resembling a college homecoming event where the returning alumni complain about how the place has gone downhill since they left, while current seniors crack jokes and make fun of the old geezers wandering around the campus.

So, what does this have to do with the tech market? Well, I think it highlights two cultural and media tendencies that are hampering growth in that market — shallowness of topic coverage and fragmentation of media coverage. And these tendencies mean that we are not yet seeing the kind of growth in what we call Smart Computing technologies that the tech market experienced in the 1990s around the Internet.

Let’s go back, for a moment, to the 1990s, when the Internet was taking off. Back in those days, the media comprised the three major TV networks; general news magazines like Time and Newsweek; the business press of The Wall Street Journal, The New York Times, Businessweek, Fortune, and Forbes; and the Internet-focused upstarts like Wired or Fast Company. These media outlets had the budgets and resources to research and report in depth on the new phenomena of the Internet, as well as the myriad ways that “the Internet changes everything.” And these news stories were read by every business executive — they would read an example of a company that was doing something new and innovative with the Internet and then return with instructions to their IT departments to get innovating immediately. That cycle of publicized success stories feeding ripples of interest driving new investment helped drive the explosive growth in the tech market from 1994 to 2000.

Today, the conditions for this cycle of growth are far less favorable. Time and Newsweek are struggling; the major networks now compete for share with the narrower cable channels; Fast Company is history; Wired is a shadow of its former self; and Businessweek, Fortune, and Forbes have diminished readership and revenues. The Wall Street Journal has reduced the number of deep articles about how companies are using technology as it has increased its coverage of sports and lifestyle issues. And none of these traditional media have the breadth of reach or depth of mindshare that they used to have. Even when traditional media companies cover technology and its affect on business, their coverage competes with cable business news channels, blogs, tweets, and other social media, which tend to provide much shallower and trendy commentary. As with Glen Beck’s or Jon Stewart’s cable shows, the focus is on entertainment and opinion-molding, not on enlightenment. It is a rare blogger or cable business news channel that takes the time to do a serious case study of how technology is transforming business in a specific company or industry. 

The result is a paucity of serious analyses about how Smart Computing (or cloud computing, or service-oriented architecture [SOA], or unified communications) technologies are actually transforming businesses, which are reaching fewer business executives, who are not rushing to buy these technologies to get ahead of or catch up with competitors.

Growth in new technology is still occurring. The business value of the new technologies is being communicated by vendors to clients through traditional sales-and-marketing channels. Case studies of companies achieving value are available. As an example, InformationWeek as part of its annual IW500 benchmark report provides 20 examples of “ideas to steal” — in its 2010 report, 12 of the 20 are examples of Smart Computing and six are cloud computing examples (some were both). But even with these success examples, the change in the media landscape means we are not yet seeing the hypergrowth stage that the old media coverage of the Internet provided during the 1994-2000 tech boom.

So what should vendor strategists and marketers do in this new environment? The value of strong and compelling success stories still remains, but the channels for communication have changed. With traditional media more fragmented, less interested, and less influential, vendors need to cultivate new social media channels, pitching noteworthy case studies to well-read bloggers, and creating online forums and communities to share examples of business value from new technology solutions.


I wonder how cyclical media

I wonder how cyclical media fragmentation is. I'd imagine in the introductory stage of a new media, many, many players scramble to establish themselves as leaders. There is definitely a changing of the guard, niche sites have more power than the broad low quality content on the all encompassing old style Times like sites (and then they get bought out by AOL...). It make take a few years, but I imagine there will be much more consolidation of web content...

Are media changes really the main reason?

Andy, interesting post. My daughter attended Stewart's rally. And I think there's something to what you say about the impact of the changes in media channels on the rate of business investment and innovation in Smart Computing or other new technologies. But are those changes really the main reason?

I suspect the tendency for firms to sit on mountains of cash right now is a bigger reason. We still hear clients say "we're being asked to do more with less." Business leaders have come to expect that they can squeeze more money out of their IT budget every year, and keep delivering more value to the business. And that's even true, to a certain extent.

But Smart Computing is not one of those things you can get "on the cheap." And as long as firms are incented to sit on their cash by low interest rates and supposedly high levels of uncertainty about the potential ROI from investments they might make, this will impede its breakout.

Furthermore, a lot of the most compelling Smart Computing use cases require public/private partnerships, and public-led investment strategies (like smart traffic management systems that are more common in Europe today than in the US). And that kind of top-down led action to drive infrastructure investment is suddenly very out of fashion, very 2009. Yesterday's election results make it even less likely such investments will happen.