Technology Industry Life Cycle

My professional career started in ERP Consulting, and I had the interesting perspective of undergoing the "SaaS Transformation" where our business model shifted from selling upfront software licenses along with the servers and even desktops to operate them, to ultimately saying "Click this link and sign-in ..."

What I also started to notice was that at the time our industry was undergoing this transformation, as we were implementing ERP for clients we were participating first-hand in their own transformation.  From Agricultural Cooperatives, to Distributors, to Medical Device Manufacturing, every industry is impacting by this sea change.

I had somewhat assumed each industry had their own unique flavor of transformation.  It wasn't until I started working in the Connected Home Space, focused on B2B Partnerships that saw again how Trade Professionals, Energy Utilities, Banks, were impacted and that I recognized there is in fact a common pattern:

Looking at the well known "Product Life Cycle" model, there are 4 Stages:

Product Life Cycle 
https://en.wikipedia.org/wiki/Product_lifecycle
https://en.wikipedia.org/wiki/Product_life-cycle_management_(marketing)

1. Introduction
2. Growth
3. Maturity
4. Saturation / Decline

Technology Industry Life Cycle
This lifecyle is an overview at an industry level and how major companies innovate, compete, and convert over time.  I don't think this is exclusive to Software as a Service (SaaS) and Recurring Revenue Models.  It seems to apply to "On Premise" technologies as well:

1. Innovation
2. Growth - Generalized (Horizontal) 
3. Growth - Specialized (Vertical)
4. Growth - Onboarding Speed
5. Stabilize - Switching Costs
6. Commodification or Innovation (back to 1)

1. Innovation

A new technology enters the market.  Early adopters.

2. Growth - Generalized (Horizontal)

New competitors approach market; Others add technology to existing portfolio

Consumers and competition focus on comparing features and capability.

3. Growth - Specialized (Vertical) 
Competition begins to shift to adopting technology with industry specific approach.

4. Growth - Onboarding Speed 
With industry specialization, remaining market adoption is limited to cost and speed of onboarding.  Competition invests in capturing this segment.

5. Stabilize - Switching Costs

With market saturation, high switching costs tend to keep market distribution highly stable, with the exception of significant customer service, price, or performance issues

6. Commodification, New Specialization (back to 3), New Innovation (back to 1)
As technology becomes a commodity, the primary opportunities for growth become:

A. New Specialization - Bringing the Technology to a New Industry / Channel
B. Industry / Target Market Turnover (new companies in channel represent new opportunity)
C. New Innovation

I look forward to writing more about each of the stages in future posts.