How difficult is the business of Digital STB/iTV middleware? How many attempts have there been to create a long-term sustainable business in this field, only for it to fail? Middleware is expensive, requires huge engineering resources, long implementation cycles, onerous testing and in-field evaluation. This makes middleware a difficult sell into the market because apart from any technical requirements there are many other players in the value chain that need to align beforefore there is any deployment and ultimately a middleware success.
Whilst this is the case, since TV went Digital, it has not stopped companies trying to make big business in this market segment. Since the 90’s many companies reached a certain maturity; their Middleware tenacity paid dividends and they seemed to be on the crest of a wave – then Kaboom! It was all over. This has been due to, in the main, a technology or market requirement change. In fact the Television Middleware market has seen a lot of these changes over the years with a plethora of new technologies appearing every few years. Embedded technologies such as MHEG5, PowerTV, Liberate, MicrosoftTV, OpenTV, Mediahighway, MHP, OCAP, ACAP, GINGA, EBIF, On-RAMP, Tivo, Moxi, GEM, HbbTV, Flash, HTML5 and others have all been put through their paces, struggled and have either failed or have been ousted by another. The Broadcast/Operator Markets get bored with middleware after a few years. Naturally new software and services evolve, new companies emerge in the form of young, hungry and agile businesses that are able to distract those middleware customers. The latest is SECOND SCREEN/COMPANION SCREEN and the CLOUD interactivity which is a cheaper ‘non-embedded’ solution much more favourable in terms of CAPEX & OPEX considering many Broadcasters and Operators already have On-Line services as part of their business today. However, once again alignment of many players is going to be the key to its success.
For those Middleware Companies who have not invested and merely followed the trends see their failure to innovate shrink back their business opportunities quickly. They fall behind by selling their Slideware. The answer is really quite simple and that is to have an innovation team in place, but this rarely happens if there is weak management in place. A significant disruptive issue is that the cost level of new-software royalties demanded by new players is radically changed downward and the middleware business teams start to feel the pressure. As the Business Development manager presents this market issue to a bemused Senior Management team he is told that He and Sales must sell what they have and stop complaining about the company portfolio! The deals actually slow down then the actual customers you have play with this market phenomena working you harder for less money. It is brutal! I have lived it twice now! The following is a list of things that happen when weak management fails to innovate…
- Management starts to bury its head in the sand, blaming the workers on the coal-face for lack of sales
- You are forced to focus on short-term results which drives out all ideas that take longer to mature.
- Changing a new technology direction evokes fear of cannibalisation of current business and this fundamentally prevents investment in new areas.
- Most of your resources are devoted to ‘day-to-day’ business so that few if none exist for innovative prospects.
- Innovation becomes someone else’s job and not part of everyone’s responsibility.
- Ideas are often quashed as outlandish and there is a retrenching by the old guard of the company.
- An efficiency focus eliminates free time for any fresh thinking.
- There is an avoidance of responsibility and therefore no process to nurture the development of new ideas.
- We look internally as we panic rather than starting with the market changes and customers’ needs and problems
- Try to sell people technology that you have, which is not what the customer wants so they go to your competitor.
- All incentives are geared towards maximizing the present business and reducing risk although it is not possible.
- Senior managers immediately look for the flaws in new ideas rather than teasing out their potential
- Budgets are squeezed, marketing is reduced, cost cutting is the answer.
- You start to sell what the customers want to hear; it become Slideware selling.
- You can excite the market but cannot deliver the technology in the time-frame required.
- Competitors overtake you, squeezing you out of new deals.
- When you do finally have the technology it is too late as the market has already chosen.
- The managers that speak up and highlight the inneficiencies are quashed and replaced with yes-men.
- The company struggles and the inevitable happens.
One thought on “Why Many Medium Sized Middleware Software Companies Fail”
Proven expertise to Analyze and understand the current state of your problem and to provide the specific quality solution to the concerned problem. These solutions empower you to benefits of technology and take advantage of the new opportunities while constantly adapting yourself to change. software company