Innovation and new service development

I have just spent most of the day listening to a group of people debate how my company should develop a range of new service offerings.  Lots of opinions, not many new ideas and a lot of obstacles.  I finished the day not particularly encouraged by the prospects but not too discouraged either. 

Half way through the day my boss asked me to provide some thoughts about IT trends and the most stand out trend is “simple software as a service” and that developers of such services seem to:

• Start small and lean
• Have ownership of the entire end to end solution
• Innovate in small steps in direct response to customer feedback
• Have a direct relationship with their customers, no sales force, distribution channel, company IT team etc in between them and their customers
• Automate everything and use network effects
• Supply their service direct to the user over the web
• Create a community around their solution to create buzz and provide an efficient mechanism for scaling
• Have a persistent relationship with their users, ie one that doesn’t end once the user has downloaded their software

Then I took a break from my long conference call to watch an episode of Horizon on space tourism,  it was absolutely inspiring, as I watched I realised that the companies involved were incredibly innovative and achieving productivity levels that were orders of magnitude greater than their traditional aerospace competitors.  How were they doing this,  it seemed to me that they had a lot in common with software as a service providers. 

I concluded my day thinking that we need to make a lot of structural changes to compete in this new world.