Rethinking the two technology Moores

Throughout our technology careers, most of us have cited Moore’s Law about how fast technology evolves, or Geoffrey Moore’s “Crossing the Chasm” to speed up launches of products. To say each has been seminal to strategizing and marketing in technology would be an understatement.

In recent years, however, I have noticed how we conflate the two. We are increasingly confusing speed at which technology supply evolves with speed of customer adoption.

Bill Gross tweeted the graph below. Most of us shake our heads and go, see customer adoption is accelerating with new product introduction. You don’t have to go to CES every year to see we are releasing new products at a breathtaking pace. You don’t have to be a Gartner analyst to see hot buzzwords only last a a few weeks. 

But the graph only shows 50 million users in a world with 8 billion humans. How long does it take to get beyond the first 2% or 20% or however you want to define as the “chasm” and capture the rest of the world?

In my research for Silicon Collar, I found tons of examples that it actually takes decades. Here are a few examples:

• Oscar H. Banker was granted way back in 1940 the patent for the automatic transmission in cars. In 1965, Playboy highlighted "Bye-Bye Stick Shift." Now, over 50 years later, more than half of the light cars sold outside the U.S. still have manual transmissions.
• Luther Simjian, a prolific inventor, convinced some New York City banks to try out his Bankograph, the predecessor of the modern-day ATM, in 1960. Almost six decades later, although mobile banking has taken off and ATMs are ubiquitous, our downtowns and strip malls are still studded with bank branches staffed by human tellers. Just in the US we still have 90,000 bank branches and countless more around the world. Virtually every bank customer has the means to automate their transactions, but hundreds of millions still choose to do so in person.
• With digital voice mailboxes, word processing, and smartphones, who needs secretaries or administrative assistants? According to the Bureau of Labor Statistics, that category still employs nearly 4 million workers in the United States decades after those innovations started showing up in our offices. Many million more do those jobs around the world. 

There is no proof that contemporary products are getting adopted quicker. The most successful product launch ever – the iPhone - has sold around a billion units over the last decade. But several consumers have bought multiple versions, so the global penetration is still less than 5% of the total addressable market (my definition, not sure Apple wants to sell the product to every consumer). Even more startling - Tesla for all of Elon Musk's marketing reach has only .2% of the US car and light truck market. That's not a typo. Globally, it has less than 1/10th of 1% market share.  

In the enterprise, product adoption is far slower. Watson, even after years of rollout and publicity, still does not generate even 5% of IBM’s revenue. HANA, after years of SAP’s pushing, still does not have even 5% of the database market.  Cloud applications after two decades since Salesforce and NetSuite were launched have replaced less than 20% of enterprise on-premise applications. In SAP Nation 2.0, I cataloged the slow pace at which Oracle Fusion, J D Edwards OneWorld, Infor CloudSuite have been rolling out. SAP’s S/4HANA is following a similar trajectory.

What does this mean? We really need to stop hyping customer adoption and celebrating too early.

Which brings me to Gordon Moore. I have not met a single person in the industry who does not take pride in Moore’s Law and the price/performance curve technology supposedly moves on. In contrast, I have not met a single software or outsourcing executive who will not argue that it does not apply to them. It only applies to chips. Really? Productivity and efficiency can apply every where. Go see Six Sigma and CMM Level 5 shops.  

There are some notable exceptions. AWS has delivered 50+ price cuts in the last decade. And look how fast it has grown.

So here’s the lesson. If you move down Gordon Moore’s curve you will also move quicker past Geoffrey Moore’s chasm. Time for the industry to renew our commitment to each of the Moores. But with some serious commitment.