What is the Product Life Cycle?
So, we’re nearing year’s end. And if you’re prepping next year’s budget, you’re likely looking at how to invest in your IT budget as well. You have to keep many things in mind while you do this. A couple of them are the product life cycle and the technology life cycle.
The product life cycle (PLC) is a series of stages that a product goes through from its entry into a market through its exit. The 4 stages are:
- Introduction: The product or service’s entry into the market.
- Growth: The stage at which a product’s sales are increasing (assuming that the product is successful).
- Maturity: Rivals move in, sales growth slows down.
- Decline: Sales decline.
We (should) use the PLC to better understand where a product stands in the market and how it will develop in the coming years. It has its limits though.
What is the Technology Life Cycle?
The PLC is not technology-specific. When evaluating a particular technology’s place in the market, we would look at where it falls in the technology life cycle. This cycle consists of these stages:
- Innovation (R&D): A new product is created through R&D.
- Syndication (also, “Ascent”): The product is demonstrated and commercialized. Features are still in flux.
- Diffusion (Maturity): Market penetration through customer acceptance of the technology.
- Substitution (Decline): The product is replaced by something else.
The Business Impact of Both Life Cycles
By looking at these models, businesses can gain real insights on their product’s future.
- People who adopt a product at the introduction/innovation phase are “innovators”. They either have money to spare, or simply don’t care how much they’re paying. They also bear the (big) risk of being the only users of a product or technology, since a just-launched product might not succeed…
- People who adopt during the growth/syndication phase are:
- Early adopters – these people buy something while it’s still early in the phase. The product has a presence, but isn’t quite what you’d call established yet.
- Early majority – these are people who buy a product late in its growth/syndication. There’s sure to be other users by this point, and the product might have just become necessary just to be truly competitive.
- People who adopt at the maturity/diffusion stage are viewed as the late majority. They’re dragged along by the inertia of the market. Everyone else is using a particular standard, and so the late majority will have to use it too just to be on the playing field.
- Lastly, those who adopt a product while it’s in its decline or being substituted are known as laggards. The product won’t be pricey, but, on the other hand, their usefulness might well be on its way down…
On average, we would say that the lowest risk and best ROI for people adopting anything is to be part of the early majority. Adopt too early, and you’re paying a lot for something that no one else may use. Adopt too late, and you’re putting money into something that may not be useful for long.
Where do IT Cloud Services Fall?
We can say that cloud services are between the innovation and syndication stages. New products are created on a daily basis, and not everyone has accepted them yet, although there are key products that almost everyone uses (think Dropbox). The seismic shift is starting; big players like Microsoft and Adobe are really embracing the cloud.
According to one IDC study, spending on IT cloud services is expected to increase from $56.6 billion in 2014 to $127 billion in 2018. Spend on IT cloud services is expected to grow at 6 times the rate for overall IT purchases. By 2018, more than half of the world’s software, server, and storage spending growth will be on the IT cloud, all because cloud services are being created for every type of consumer and enterprise.
Because of this growth, IT managers and CIOs need to ask an important question.
“Is my company ready to make the jump to the cloud?”
To the best of our knowledge, there’s no checklist to help us answer this question yet. But, we can offer up a few key points and questions to consider:
- Know that cloud services are coming. There’s no avoiding them. You saw the IDC figures above; cloud services will become part of your IT budget, no matter what. It’s an obvious point, but it needs to be made regardless.
- Check to see if your current technology providers have cloud services, or have real plans to adapt their offerings such that they can delivered via the cloud (it can be done! Even infrastructure can be cloud-based).
- Check the status of your own (legacy) systems. Can they be integrated into cloud offerings? And if not, how much effort will it take to adapt them?
If you don't believe #1, you need to reconsider; you don't want to be caught being a laggard for this technology! If you’ve accepted #1, but your reactions to #2 and #3 aren’t in the affirmative, then you’re also unlikely to be ready. In which case, you need to become better informed.
If you’re ahead of the curve and already have a fair bit invested in cloud services, then you’ve probably encountered the first major challenge of working with intangible cloud services: Managing them. Managing resources when you can physically touch them is hard enough; what happens when you can’t?
That’s when you invest in an IT and telecom expense management solution like Cimpl. Cimpl is an SaaS that applies big data principles to help you gain visibility and control on everything in your company, including virtual services and assets. If this sounds like something that makes life easier then you should contact us! We’re Canada’s leader in IT and telecom expense management and we’ve been giving people control over their assets for 15 years. Make your transition to the cloud painless by using Cimpl today!