Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

5 signs that a vendor won't make it to 2020

Rob Enderle | Nov. 27, 2014
We won’t name names, but there are some telltale signs that a vendor won’t make it to 2020. Rob Enderle identifies conditions for failure and tells you how to apply those dubious qualities to your vendors to determine if they are going to stay in the game.

vendor failure
Credit: Thinkstock

I'm not going to call them out by name. I'm not that fond of getting nasty calls from PR folks, but I'm going to list what I think the conditions are for failure and you can then apply those conditions to your vendors to see how they fit. This goes beyond technology and into most areas of business.  

Let's walk through the danger signs.

1. Massive Change
There are a number of massive changes set to hit the market this decade. Artificial Intelligence is the scariest and a growing number of folks believe that this may be the thing that ends the human race if we aren't a lot more carful than we have been.  

Granted they said that about the atomic bomb and Hadron Collider, but those also posed huge risks.   Comprehensive converged data centers, whether they are inside or outside of firms (public or private clouds) are changing massively how we buy technology and, once in place, tend to lock out everyone else.  

Social Manipulation from products like Plague will make it far more effective to manipulate people's opinions rather than just respond to them. And robotics, which encompass everything from self-driving cars and scanning 3D printers to robots like Baxter which can easily replace individual workers, all converge to make the world of 2020 vastly different than the world of today. Past misses of PCs, the Internet, search, social media and consumer electronics all pale in significance to what is coming and most vendors just aren't prepared for this level of change.

2. Unprofitability With Low Reserves
If a firm isn't making money, it isn't building up reserves and firms will need large reserves as the retool for the coming massive change in this segment. A small firm that can't find profit, or a large one that can't simplify to create it, simply won't have the operating headroom to survive the change that is coming.  

There is one segment where this may not be true and that is software because the capability for software to pivot quickly is unmatched in hardware or services.   If a company is basically on life support, unless it has some kind of amazing breakthrough hit (which is statistically unlikely), it probably won't be around in 2020.  

3. Excess Complexity
To survive the coming changes firms will have to identify the risk and then pivot quickly to address it. Large complex companies can't pivot, which is why the majority of companies that were around in the '80s weren't around by the end of the 1990s.

If you are big and complex your capability to pivot timely is vastly reduced as is your capability to address changes like this in a timely fashion. There are too many distractions, too many executives who will actively refuse to see the change and then when they finally do, or are replaced, too little ability to drive change into the firm.   Sony is a good example of this. It got overly complex and both Apple and Samsung took them out at the knees as a result.  


1  2  Next Page 

Sign up for CIO Asia eNewsletters.