Why Adopt Sideloading Now?
“The difficulty lies not in the new ideas but in escaping from old ones.” - John Maynard Keynes
Sideloading is a catalyst
Products are a creation of perception as much as technology. An iPod is a computer that is defined by the perception of its purpose rather than its technology. A DustBuster and a vacuum cleaner share the same technology, but they are perceived to be different products. Sideloading can redefine and change product perception, because storage is now relatively cheap and content expensive.
Any new technology competes against established methods either as a cost, consistency, or availability substitute or a new product or new customer enabler. As a substitute, sideloading can reduce inventory and distribution channel costs, improve customer experience by reducing installation conflicts, and make a vast number of applications immediately available.
But as an enabler, sideloading can transform perception to create product solutions that address new markets and bring in new customers. Sideloading can catalyze a winning business model by offering the equivalent of an App store in every new product. Sideloading can decommoditize an erstwhile commodity.
Industry instability
The PC industry ecology is highly unstable. So, an innovation as innocuous as customizable digital preloading can have the impact of a falling meteor on industry dinosaurs.
The dominant players are all at risk of being marginalized as the personal computer industry evolved from a vertically integrated design-build-market to horizontal specialization dominated by Intel, Microsoft, ODMs, and a few retailers. Intel is now at risk from web appliances and netbooks that run better with inexpensive RISC processors. Microsoft is likewise exposed to serious competition from ubiquitous browser-based applications and simple devices that have no need for the elaborate and expensive functionality of Windows.
For years, Intel and Microsoft commoditized PCs, extracting the lion’s share of profit. Standardization killed margins and with them industry opportunity for sustaining innovation and growth, leaving the hardware OEMs and ISVs to fight for scraps. The OEMs outsourced, initially components, then assembly, and now complete system design and manufacture is contracted.
Personal computer makers failed to find a model to subsidize hardware as had done the printer, game console, cell phone, pager, and cable box industries. Brands are now supported by unwelcome advertising. They sell their desktop space to crapware, losing consumer loyalty, and depleting their brand equity. They are vulnerable to private label products supported by trusted retailers.
The ISVs, hit by bundling and application functionality added to the operating system, consolidated around monopoly positions in security, web publishing, gaming, and structural design. The OEM direct sales model, internet-driven comparison shopping, and web retailers have forced down pricing, reduced inventory, and killed off weaker competition. Retailers are providing equipment setup and aftermarket repair services. Amazon even designed its own hardware to support their core business.
Preloading selected digital assets via sideloading is the natural progression in the evolution of the industry. Permission marketing of software trumps intrusion by trialware. Sideloading can help established or new entrants produce new perceptually differentiated products because commoditized hardware is perceived to be of negligible value, while access to selected content has become more desirable.
Economic concerns
Economic downturns highlight divergent management styles. Short term reactivity favors drastically shrinking headcount, R&D, M&A, travel, and advertising to ride out the storm. This mentality doesn’t preserve the health of the organization or foster its growth. Long-term companies, like Wal*Mart, Exxon, Bloomberg, Ryanair, or Hyundai, leverage turmoil to aggressively grow their market dominance or take share from existing leaders.
Overcoming hurdles
Given these circumstances, companies ought to eagerly seize any life preserver boosting margin, share, and ASP. But successful companies in the best of times have inherent vision and curiosity blind spots. Strong corporate cultures can be biased towards the inner-directed and risk-adverse. Nonfounding corporate managers are disincentivized to be risk-takers. ‘Not invented here,’ ‘It’s not my job,’ ‘Don’t rock the boat’ and ‘If it ain’t broken, don’t fix it’ reflect innovation pernicious attitudes that adversely alter perception of risk returns.
By not rocking the boat, they miss the boat entirely. Centralized organizations inhibit regional units from quickly acting on local opportunities and independently innovate. Decentralized organizations lose the synergies available, when fiercely autonomous P&L groups fail to collaborate. In these circumstances, sideloading is incorrectly perceived as undifferentiated from current practice or not having a enabling utility.
Sideloading is not a panacea. It won’t eradicate world hunger, although it can reduce global warming. Sideloading is a disruptive innovation. How disruptive? It will alter the delicate equilibrium established among component, brand, and contract manufacturers, software vendors, and retailers. It has potential to create a preemptive “winner takes all” situation in the PC industry and empower those working in the shadow of Microsoft. Carrying inventory is free!
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