Age of the App

Rogers and Moore’s customer adoption curves illustrate the results of several factors in apparent opposition; Value and Risk.  This two primary factors have been used to explain customer purchasing behavior as well as clustering customers into groups based upon purchasing time within a product’s lifecycle.  These simple models, which have proven useful to traditional marketing and sales organizations, but may need to be adapted to today’s new market dynamics.

Markets are becoming saturated with feature-rich products that promise value at the end of long implementation and adoption curves.  This had placed the majority of revenue in vendors pockets while placing the majority of risk in customers hands.  However, with the introduction of cloud and other same units of functionality such as smart phone apps, customers are rethinking purchases and demanding value capture for purchase much earlier, almost immediately upon purchase.  This shifting dynamic is requiring companies to rethink new revenue models based upon consumption economics.  This places more risk upon developer as the majority of revenue is generated through utilization charges not a single purchase, but has the potential to create a longer and more staple revenue stream over time.  This concept was introduced by Chris Anderson’s book The Long Tail.

This suggests that businesses will need to rethink how products are produced and adoption encouraged.  No longer can a vendor rely on a long list of features to attract and retain a consumer base.  Vendors will need to focus more on the value customers receive easily which suggests an increase focus on customer experience as Pine and Gilmore suggested in their book.  Making customer experience a primary design consideration infers a new way of thinking; an outside in design approach as advocated by UX gurus Alan Cooper and Bill Buxton.  This promises to be a more radical shift in software development than switching to Agile development.   But the signs are clear, the age of the App has come and vendors that wish to thrive in the market will learn how to capitalize on this approach and trend.

 

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About briankseitz
I live in PacNW in a small town and work for Microsoft as a Enterprise strategy and architecture SME. I enjoy solving big complex problems, cooking and eating, woodworking and reading. I typically read between 4-8 business and technology books a month.

2 Responses to Age of the App

  1. ehdf says:

    I do agree with the fact that businesses must re-think revenue models and share risks in greater levels. They must act now!

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