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New technology—new business models

Technology is ever evolving. However not at a constant pace. The rate of change is accelerating proportional to discovery, which itself is proportional to the application of new technologies. There is a positive feedback loop happening here. As a result so many ideas of income generation are being constrained by lack of experts in current discoveries.

The desire to employ experience may have to accept compromise and swap out experience for current knowledge in many fields of occupation. Inexperienced recent graduates love this concept as their knowledge is current and it provides greater opportunities to career employment. Those with experience of yesterday’s concepts and technologies will have to work on upgrading their knowledge… the cycle is age old, continuous and now ever increasing.

Adobe came up with a new concept of business that would see customers turn into clients by leasing their products through an account rather than buying them as customers. This model is based on the idea that most users of Adobe products are professional users, as many of the Adobe products are considered as industry standards. As a professional business owner, leases are dealt with differently to purchases under many taxation laws. This may be favourable to many businesses.

However it carries a stigma that big brother is leaning over your shoulder and holding all the cards. Over a period of time your expense may exceed that of an outright purchase. However when you take into consideration the fact that technology and its tools will eventually need upgrading—particularly when used in profession circles, then you find yourself back to square one… outlying funds again. Is that any different to leasing?

Adobe’s model is based on the fact that their technology does date and will need to be replaced eventually on an ongoing basis, so why not do it in smaller increments and more often as updates and upgrades are continuously being released. Adobe have more control on when and how often their product being leased by clients is updated. It helps Adobe with tuition and product support services when all clients are on the same page.

It also separates the genuine product from hacks and fakes as only the genuine product is maintained through online connection of client accounts. It is very evident through online tutorials on using the various tools how constant changes to these tools soon renders tutorials out of date. In fact you could be excused for thinking a tutorial is incorrect—unless it states the version it applies to and you missed that.

The drawback of the new Adobe model hits amatures and enthusiasts. They do not have to continuously keep up with the competition. If the tools do the job for them they will be satisfied for a long time. There may be more proficient ways to achieve results introduced with newer upgrades, but enthusiasts are not concerned with proficiency if it means spending more money.

There still is the threat that clients may end their Adobe lease to purchase alternative tools that come onto the market if they can match the Adobe product for the client application, however they too will eventually need upgrading to keep up with new demands as they evolve. There are a lot more creative digital media development tools appearing through online services now, catering to the non-professional sector, that are evolving and heading toward professional quality performance. The model they follow is one of providing a limited version free to users to attract a large online following that builds up an influence in the marketplace before launching a professional product that comes with a subscription. A secondary benefit to a large online following is the potential revenue from advertising.

As mentioned earlier, business owners have to take into consideration tax benefits of leasing and the value of ongoing free support to be able to make a real comparison. I’m sure Adobe gave thought also to the fact that once you become familiar with complex tools, it is hard to let this skill go to face a new learning curve on its new replacement.
It appears the Adobe model has merit. Thanks to advances in digital technology we are now all connected 24/7 like never before. There is a current trend to identify business needs and service them in ways that would not work too well without this full-time online connectivity.

One example is Traackr (http://www.traackr.com). It works on the premise that brand recognition increases with exposure and that exposure is increased through influencers. Any organisation following that logic will start looking for these influencers. That involves considerable research. Traackr say’s “let’s do the research ourselves and compile a digital database and user tools to make the most of it, then open it up to subscribers for a fee”. Now subscribers can locate prospects as new ambassadors of their brand without having to do all the groundwork from scratch.

These are examples of some new business models that only work well thanks to new technology that is shaping our culture like never before. Ideas are flowing but in many cases finances are not. It takes considerable trial and error breaking new ground before success can be found and often it comes back to that age old concept of perseverance verses dwindling finances.

Researched and written by Gavin Lardner, CC BY.

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