How the slower economy changed management

I’ve been watching the management market for quite a while, and there are some interesting dynamics that have happened as a result of the slowed economy.

Vendors are listening carefully to their customers. Even some vendors that didn’t have a history of doing so are now believers. Now as they bring out their new releases of software and hardware, their products are addressing today’s real-world problems.

I applaud the fact that vendors are listening to their customers. However, as management product development works to solve today’s customers’ problems, it must also look to the future, so that it will solve customers’ problems in the future as well.

Given the reduced investments by the venture capitalist community in general over the past few years (although this is turning around), one would have expected that the amount of innovation in management would have decreased significantly. From my perspective, I didn’t see a noticeable decrease in innovation.

Where I did see a change was in the number of companies doing similar things. Before the economy headed downward, depending on the area of management, there were many, many vendors fighting for the same IT spending dollars. Some of the decrease in the number of companies competing in selected areas is attributable to acquisitions. However, it’s my contention that a large part of this dynamic is due to that fact that venture capitals have been very careful in scrutinizing the companies that they funded. So a company that received funding a few years ago saw its opportunities for additional funding drop significantly. Many small companies were victims of this scrutiny.

At the other end of the spectrum, larger vendors have been looking to drive demand for their products by meeting broader customer needs – the needs of the business. Technology products have been positioned squarely to help businesses tackle business challenges. Reducing costs, increasing efficiency, and complying with regulations are some of the areas that management products have taken on.

While some skeptics criticize initiatives like On Demand and Adaptive Enterprise as marketing fluff, in the long run, this is where the management industry must evolve – to run IT infrastructure in support of and as an enabler of the business, rather than technology for technology’s sake. Yes, these are vendor marketing initiatives, yet they have had an impact beyond just the very large vendors. Integration of management products, proactive management vs. just monitoring, provisioning, automation, and efforts to develop standards for management are developments that are good for the management tool markets.

Finally, “rapid time to value” is another key dynamic that has become a mantra for all management vendors, which hasn’t always been the case. This significantly benefits consumers of the management tools. 

Although it’s been a tough road during the past few years for the tech industry, the good news is that progress and innovation has continued. Luckily, the vendors haven’t been sitting on their hands waiting for economic recovery. And hopefully, IT organizations have been doing the same, and moving forward. It’s all good – and contributes to competitive advantage.