Magazine article Information Today

Keeping an Eye on the Slinky: The SIIA (Software and Information Industry Association) Information Industry Summit Offered Encouraging Signs of Hope for the Future. (Report from the Field)

Magazine article Information Today

Keeping an Eye on the Slinky: The SIIA (Software and Information Industry Association) Information Industry Summit Offered Encouraging Signs of Hope for the Future. (Report from the Field)

Article excerpt

On January 29 in New York, approximately 200 information industry executives attended the SIIA Information Industry Summit, titled "Meeting the New Challenges." The event was sponsored by the Software & Information Industry Association's (SIIA) Content Division, and it addressed key strategic issues identified by the SIIA's online business, e-publishing standards, and digital rights working groups. As such, it attracted companies that publish, distribute, or develop technologies for online content as well as financial firms that fund the industry. It also attracted the senior management from these companies. Nearly 75 percent of the attendees were at a vice president level or higher in their organizations, and 35 percent were CEOs and other company heads.

Peter Simon, chairman of the SIIA Content Division, opened the summit by giving the audience background information about the SIIA and an overview of the program. Following remarks and introductions by SIIA president Ken Wasch, West Group's Michael Wilens gave the keynote speech and used the Slinky Effect, the Double Bubble, and the Three-Body Problem to explain what happened to the Internet economy last year and what could be learned from it. Wilens was followed by a panel of financial experts who presented a rather dismal outlook for funding in 2002.

The next panel included executives from traditional information companies and Web start-ups who discussed what they did to cut costs and survive last year, as well as what their strategies will be going forward. Lunch speakers speculated on the future of the Internet and attempted to shift the program to a positive note. They were followed by an afternoon panel that reviewed new options for packaging and selling content. Finally, the program closed with a solutions showcase that presented content-focused technology selected by an SIIA advisory panel on the basis of innovation, promise, and readiness for the market. This showcase provided further signs that life may be returning to the industry.

Lessons Learned

In his keynote, Wilens reminded the audience of the ways in which the Internet has radically changed information technology in a very short time. He said the Web not only revolutionized online distribution by eliminating the advantage of proprietary platforms and creating standards for technology and business, it also energized product development. As a result of the development of new technologies during the Internet boom, product cycles increased from 3 years to quarters, months, or even weeks. "To remain competitive," Wilens advised the audience, "businesses must get even closer to their customers and plan increasingly shorter time frames."

Wilens used three visual images to illustrate other important lessons that could be taken from the expansion and implosion of the Web economy. The first was the Slinky Effect. He compared the early adopters of technology to the leading edge of a slinky and the bulk of users to the trailing edge, which holds off until the last minute and then jumps all at once. The industry, he said, focused too much attention on the front, which moves more frequently, rather than the back end, which moves in a much bigger jump and has a bigger impact on profits. His advice to the audience was to use the front for directional guidance, but not to lose focus on the back. He used the example of Third World countries: They jumped from no telecommunications infrastructure to ubiquitous cellphones, with no interim step.

The Double Bubble economic model occurs, Wilens explained, when risk-adverse customers (i.e., the trailing edge of the slinky) buy the same product twice on different media and create a revenue bump. When they finally accept a new technology, revenue from other media declines as it did in 2001.

Wilens also advised companies to stay flexible and not shut off options by predicting any farther than 3-4 years out. He described the interaction of content, technology, and distribution in the information industry as a Three-Body Problem and noted that the trajectory is impossible to calculate when three or more objects interact with each other. …

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