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Innovation, telecom and cookies

If you recommend technology, anticipating what is known as the "Double Stuf Oreo" model of innovation, you are risking your good name -- and your good sense.

January 1, 2001  

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We are all fortunate to be employed in an industry as vibrant and exciting as telecommunications technology. We have seen an unprecedented pace of innovation, development and commercial deployment of new technologies over the last ten years. But do you remember a time when the telecommunications business was not ever expected to undergo significant change?

For my entire childhood, my family had a single rotary dial telephone that was leased from Bell Canada. From my first memories of that telephone until long after I had left home for university and a job, nothing changed dramatically in telecommunications — at least not from my perspective as a user of the technology.

Industry experts — consultants, executives and observers from the media — did not foresee a time when things would be any different. Revenue growth for service providers and equipment manufacturers was not expected to outpace GDP growth. Industry innovation, though present in the form of things such as direct dialing and 911 services, was really focused on making one service improvement at a time — what Gary Hamel, a professor of Strategic and International Management at the London School of Business, refers to as the “Double Stuf Oreo” phenomenon: “Oreo’s are great cookies, and Double Stuf Oreo’s are even better, but … it (the Double Stuf Oreo development) is linear innovation based on a single component of the business model”.*

Nobody of consequence in the industry saw the cellular phone, the facsimile machine, the personal computer, voice mail or the Internet on the horizon, with the radical business concept changes that they would bring. Telecommunications was not, of course, alone in failing to recognize the potential for non-linear innovation in technology. Let’s look at the predictions of some well-known industry figures and publications:



Lee DeForest, inventor of vacuum triode, 1928



Popular mechanics, 1949



Ken Olson, Founder of DEC, 1977



Bill Gates, Founder of Microsoft, 1982

These predictions seem humorous now, especially when you consider that this article is being written on a 10-lb., 1.2 Gb laptop computer, in my home, with the Bills/Dolphins game on one of the hundreds of commercial television channels playing in the background.

So what information was not available to DeForest, Olson, Gates, and the telecommunications pundits of the 60’s and 70’s when they made these statements? Ultimately, their predictions were inaccurate because they did not foresee radical, non-linear innovation. They did not imagine that dramatic, disruptive technologies (the microchip, the Internet, etc.) would change the world forever.

One can draw a parallel between the failed predictions above and some of the current issues in the cabling industry. As professionals in structured cabling, we have the opportunity to recommend and/or purchase a wide variety of different types of cabling systems. Every time we make a recommendation, we too are putting ourselves in a position to be judged at a later date on our understanding of the future of networking technology.

Lately, I have heard many people state that since Gigabit Ethernet has been designed to run on the vast installed base of Category 5 cable, it follows that Category 5 (or the marginally better Category 5e) is therefore a sufficient performance standard for a future-proof cable plant. People who hold this opinion clearly have not been paying attention!

There is a global bandwidth explosion occurring, driven by the types of dramatic, disruptive technologies that made the previously mentioned predictions so absurd in hindsight. And the pace of innovation in telecommunications is not likely to wane. Telecommunications, formerly the mature, low growth business of dial tone, is one of the most highly visible segments in today’s business world. Billions of dollars will be spent to continue developing the radical business concept innovations that will make money for the shareholders of the top technology companies in the future. Bandwidth demands surely will not stall at 1992 (Category 5) levels.

So, what can you do to avoid becoming a quaint quotation in a future “View from the Board”? Specify and purchase the highest bandwidth solution that you or your client can afford! Do not fall into the “lowest-price-is-best” legacy of cabling’s construction industry heritage. Remember that the technological capability of our products and the quality of our design and installation services are the foundation upon which the future will be built.

If you build a network on old technology, anticipating only “Double Stuf Oreo” innovation, you will be leveled by the steamroller of the next radical innovation. Make sure your network infrastructure is as ready for the future as it can possibly be.CS

*Gary Hamel, “Leading the Revolution”, Harvard Business School Press, 2000

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