Where Has All the Innovation Gone?

The vendors have forgotten an important rule when it comes to product development: figure out what the customers want, and give it to them.

Where are the tech products that will help us through these tough economic times? I'm putting this question the hands of you, the reader, as the vendor community has come up short in this regard.

Where have the vendors been? Why haven't they come out with any solutions for helping business executives and consumers deal with the issues of rising fuel prices, a frozen credit market (thanks to the subprime loan crisis), and tech jobs and innovation continuing to head overseas?

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There are a couple of reasons, in my opinion.

First, the big vendors have been tremendously distracted. Microsoft, IBM, Cisco and other vendor behemoths have a lot of money. At the same time, small startups, seeing the window slam shut on the IPO market, have a great desire to get acquired before their venture funding runs dry. With so many little companies yearning to be acquired, the big boys have replaced innovation with acquisition.

Add to this the rise of social networks--which are fun for trying to build a media empire but not really of much use for consumers trying to figure out how to get an economic boost--and you have a vendor community blind to the economic bind of their customer base.

I recently did a slide show in my blog that named 10 tech products that were needed during these hard times but are currently unavailable. Among other things, I suggested mashups of social networks tied to the old concept of food co-ops; energy-management systems for the home; and consumer energy co-ops modeled after data-center management systems such as those offered by EnerNoc.

At the heart of all this, though, is filling customer needs-the first and best tenet of product development. Were Microsoft's customers crying out for a combined Microsoft-Yahoo media platform to take on Google? I don't think so. Would Microsoft's customers like to see office management applications extend back into the energy- and fuel-management systems of their companies? I think so.

I'm writing this column a few days after Microsoft put the brakes on its proposed hostile takeover of Yahoo. As we've all learned from recent high-tech takeovers, such as BEA by Oracle, a deal considered dead can quickly be resurrected if the stock price is right.

But I'm hoping that the execs taking part in and watching the takeover sweepstakes can get back to the business of innovation instead of acquisition. And I'm hoping that you, eWEEK's readers, can come up with some products and services you would like to see those vendors provide to help you through the current economic doldrums.

Eric Lundquist can be reached at elundquist@eweek.com.