Software Innovation

Dear Readers,

I have read a post on http://www.sciencedaily.com/releases/2008/01/080105140107.htm
that tells us pharmaceutical industry spends almost twice as much on promotion as it does on research and development !

This article reminds me about the Goldman & Sachs study on marketing investment Cognos, BO and Hyperion have done from 2000 until 2005 compares to their R&D investments. During this 6 years period, leading BI software companies spent all the money they get from licences in marketing and commercial events. In the BI market, this lack in innovation lead to a fast merging mechanism : when there are no innovation anymore, the only way to gain market share is to buy competitors. And when the market has chosen its “top 3” winners, those companies are bought by largest organisations.

All in one : when there is no innovation anymore, it opens the door for candidate to copy the products. In the pharmaceutical market, this is called generic companies, and they have grown a lot other the last past years. In this industry, we can see that generic companies are now buying other generic companies to increase their market share, but also to get new distribution channels.
What about the Open Source BI market ? Well, we can see that some companies are quickly moving from “functional copy” to innovation, by putting together the best of bread products available on the market and adding values to their platform. Other companies have chosen another way : raising funds in order to get a stronger position on the market, which may lead those companies to buy others or to be bought by established companies.

Don’t forget : by giving your source code, the only way to keep your position is to make regular innovations to your software and to answer to features requests.

Have Fun !
Patrick

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