Five Forces that Can Make Your Business Sink or Swim

Traditional tech vendors are in trouble if they don't adapt to these evolving models, say Gartner analysts.

LAS VEGAS—Web 2.0, SAAS (software as a service), global class, consumerization and open source are facilitating disruptions in the high-tech market even as they are becoming vital forces that help businesses compete for new revenue opportunities.

Such was the position taken by three analysts in the opening keynote of the Gartner Web Innovations conference here Sept. 19.

Those vested in the market will have to prepare to make changes in order to keep up with the innovation from rivals or risk going out of business, said Gartner analyst Tom Austin in the introduction of the "Planning for Five Major Mutually Reinforcing Disruptive Discontinuities."

The relationship between Web 2.0, SAAS, global class, consumerization and open source is complex, with each one amplifying the other in a potentially disruptive fashion. Austin said the five forces can impact the vendor balance of power, kill distribution and business models and create new ones, and create implementation alternatives.

For example, the emergence of interest in blogs, wikis, AJAX, social networks and mashups—the so-called Web 2.0 technologies—has paved the way for thousands of new Web 2.0 businesses. The startups immediately impact the traditional software makers, such as Microsoft and IBM, because customers have more options.


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Austin said that while the computer industry used to be structured to turn to one company for one problem, thousands have stepped in to offer their help to companies in need.

Primes examples include Google, eBay and While these three vendors might hardly be considered startups by some modern wisdom, the three have evolved to become platform vendors, offering software and Web services beyond search and e-commerce, said Gartner analyst David Mitchell Smith.

"When there [are] tens of hundreds of thousands of vendors out there, its no longer an issue of whos the leader," Austin said. "The best alternative will change. In the end, patterns emerge and new ways of working emerge."

As for SAAS—hosted software delivered over the Internet—Austin cited data from McKinsey, which found that 61 percent of CIOs said they would invest in SAAS, up from 38 percent in 2006.

But Austin said Gartner believes that "rogue end users," experimental pioneers willing to risk their own money, are driving the SAAS market, which can have a major impact on the downloaded, behind the firewall and perpetual license model forged by Microsoft and others.

Austin said owes much of its early success to this user group, and added that new software entrepreneurs who dont go to venture capitalists with a SAAS proposition will probably not get funded.

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