Make Solutions, Not Boxes

The market for computer networking and telecommunications technology today is stuffed with a glut of products from every conceivable angle. Whatever the user need or business objective, there is a pile of different boxes from a range of manufacturers pledging to solve the problem for less, and it’s very difficult to distinguish effectively between them.

Eventually, all computing hardware moves towards commoditisation. Competitive designs are created, manufacturing costs lower thanks to competition and Moore’s Law, and new entrants to the market are willing to cut their margins to the bone to shake up the established order.

Not to say there isn’t value in hardware; there absolutely is, and will be for a long time. However, the true value of a solution to the customer has been changing steadily for a number of years now.

It is no longer impressive for the vast majority of use cases that a box exists which can perform the task. Take Wi-Fi for example; the home Wi-Fi router is as close to a commodity product as can be imagined today, with options from $20 to $400 and little fundamental difference to the average end user between them.

Yes, the hardware may be faster and more capable in the more expensive product; but do people care? By and large, no. There is little functional difference to the average user between boxes.

What has been shown to make an appreciable difference to the usefulness and desirability of a box is integrating it well into a solution – combining hardware, on-device software and external software such that a valuable, differentiated system solution is created.

For instance, to return to the Wi-Fi example; consider a home router which integrates parental controls. There are two ways to do this:

1. Simply expose inbuilt firewall functionality, such as iptables in Linux, and tell the user it’s there if they want to mess with it. Result? Probably 1/100 customers will ever know it’s there and understand how to use it, if you’re lucky. Effectively, the product does not have this feature.

2. Create a mobile app which provides a clear, intuitive user experience that allows a parent to quickly and easily see which devices are connected, what they’re doing and lets them control who has access as necessary in real-time and based on a schedule.

I’m sure the answer to which of these is more desirable needs little explanation, but I’ll do so for clarity anyway: the second option, though requiring more development effort, more customer-centric focus and a switch away from a mindset of shifting boxes, is the clear winner.

Want proof? Ask any end user.

Solutions which focus only on shifting a box, whether targeting Wi-Fi, residential, enterprise, or any other arena of computer networking and telecommunications technology are in a difficult situation. They are at the mercy of merciless price competition, and will see their own price, margins and value erode progressively without greater differentiation and focus on customer benefits.

If the only argument you can make is the price, or think its unique that you have a box to sell for a commodity task, you are in trouble for the long-term.

This is not to say that adding such features makes you exempt from the pressures of competition. Far from it – but it does put you on equal or better footing compared with your forward-thinking, higher-value competitors, which if you are intending to provide value to your customers long-term, must be the goal.

How can you stay ahead and avoid becoming a box-shifter?

The answer is simple, but doing it is hard. Be customer-focused in all decisions, from product conception to development to delivery. Think not just of what people are saying they want, but look deep at the trends in their behaviour and identify underlying problems. Solving an unarticulated problem is the most powerful thing that a product can do for a user, and will all but guarantee a great word-of-mouth review for the solution.

It is all too easy to slip into a sales-driven mode of product development, relying on what you have done before and iterating somewhat mindlessly on it until you receive a sharp shock from a competitor’s product. By that time, it’s often too late; the wheels are in motion, and it’s hard to stop a major development effort to go back to the drawing board when it has become clear that you’ve missed the boat in a key area.

The key question to ask of your development team and business as a whole is:

Are you trying to solve customer problems, or are you trying to sell them things?

It’s a subtle distinction, but an important one. The former is constantly looking at new ways to solve articulated and unarticulated customer problems, whereas the latter is pushing what they’ve always had.

Not to say that those solving customer problems don’t want to sell products; on the contrary, they are almost always more successful than those who are focused only on selling at doing so. It’s a change of mindset that promotes creativity, innovation and creates customer satisfaction.

If you work at a vendor or manufacturer, take a look around. Are you trying to solve problems, or simply trying to sell? If you’re a buyer, look closely at those you’re buying from today.

Those solving problems in new ways will be around for the long-term, becoming progressively more valuable to their customers, investors and the market. Sales-driven, uninspired iterators will slowly but surely fade into the background.

At the end of the day, this trend means that the highest-value solutions and companies float to the top, which is good news for all buyers and end users.

For many vendors and manufacturers, there’s significant work to do, requiring a new mindset.

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