Customer-Driven Innovation

Much of the current attention in the Web services world tends to revolve around the IT vendors -- such as IBM, Microsoft, BEA and Sun -- that are working to establish key standards. No doubt, such vendor-driven efforts arecritical to the growth of the field.

However, one should not underestimate the leadership role of IT "customers" (or "users")in the near- and long-term. David Moschella, author of the bookCustomer-Driven IT, has articulated this trend quite powerfully.

"The main point is that IT market leadership is migrating away from its traditional focus on hardware and software products, and toward IT services," Moschella says. "It is these services that will prove most beneficial to those companies trying to use technology to create important new value for their customers and/or industry. Implicit in this is a greatly increased emphasis upon so-called vertical (industry-specific) markets and solutions."

There are certainly precedents for this customer-driven change. As Moschella explains, "Historically, IT industry innovation has been heavily driven by the efforts of individual suppliersIBM, Intel, Microsoft, Cisco, etc. But as part of the research for the book, I studied a number of previous examples of customer-led IT innovation, including barcode scanning, ATMs, credit cards, and EDI. What I found was that effective industry-wide cooperation has often played an essential role in the successful acceptance of these technologies. For example, the banking industry now owns and operates the major credit card and ATM networks, just as the retail industry manages the barcode standard. In fact, Visa, MasterCard, Cirrus, Plus, NASDAQ, and others are all examples of companies that are the result of customer-driven change, not the cause."

That's why we should (and will)pay particular attention to the efforts of companies such as Amazon.com, eBay and Google. These are not the classic "vendors" of technology, but rather, IT "customers." And yet, their recent efforts to open their ownWeb services technology to outside developers and expand their influence seemsquite prescient and significant.