Borders Bites the Dust – a Prediction for IT Integrators in the Wake of Cloud?

July 28, 2011 at 3:34 pm Leave a comment

Beth Vanni – Vice President

That heavenly aroma — the fresh pulp of new book pages, combined with the aroma of a strong cup o’ Joe.  All in one setting, creating a feeling of becoming enlightened and alert all at the same time.  Thousands of product choices surround you, calling your name to try, experiment, stock up for later.   Book superstores are darn near heaven for me.

So, the demise of one of those famed bibliotech institutions, Borders Book Stores, scares me on multiple levels.  First, because I love that environment, that aroma, those high-touch experiences.   My iPad is really cool, but my friends and I agree it’s not like perusing a fresh, new book in an institute of higher learning and caffeination.  And, second, because I think the death of Borders offers chilling parallels to what’s rapidly happening to today’s traditional IT product integrators.

The rate of recent automation in the world of books is truly astounding.   It’s taken about 300 years for books to evolve from the invention of the Gutenberg printing press to the first mass production of books.   But, it has taken under 4 years for us to evolve from buying books at retail to consuming content through digital eReader technology from the comfort of our own easy chairs.  Consider these historic milestones:

  • First printed book – China 868 CE
  • 1436 – Gutenberg invents the moveable type printing press
  • 1605 – First weekly newspaper printed in Antwerp
  • 1865 – Web offset printing can print on both sides of the page
  • 1954 – There are more radios than daily newspapers
  • 1967 – Newspapers start using digital production processes
  • 1990’s – The internet becomes broadly used for B2B commerce and higher learning
  • 2000 – Borders and Barnes & Noble each amass a global footprint with 100’s of stores
  • November 2007 – Amazon.com’s Kindle is announced
  • July 2010 – Amazon.com announces eBook sales outpace hardcover book sales;  Jan. 2011 eBook sales outpace paperback sales
  • Barnes and Noble announces closing of its 399 stores

Of course, the only reason Borders failed was not its lagging adoption of digital book trends.  And it wasn’t wrong in the launch of its own digital eReader.  They  were just late to the game.   Giant signs in their stores to this day tout the chain’s recently release Kobo eReader Touch Edition.  “It’s just like reading a real book” the marketing campaign reads.  But they missed the eReader wave by about 2 years, lagging behind Amazon.com’s Kindle and Barnes and Noble’s Nook.

The digital reading phenomenon parallels the creation and sale of IT technology in the wake of cloud computing in several ways:

  • The internet changed how people buy:  Has become the great enabler of buying knowledge and commerce for all markets, facilitating  product and services awareness and buying choices
  • The killer app emerged:   Yes, the internet revolutionized IT services, but when Salesforce.com rose in under 10 years to a $3b software applications powerhouse, the IT industry took notice of SaaS.
  • Social mobility is driving change:   The device “tail” is wagging the IT infrastructure “dog”.  iPads are showing up in corporate environments and IT Directors can’t keep them out.   This is accelerating the need for SaaS applications, better accessibility of corporate data and the whole concept of IT as a service.
  • All politics are still local:   Despite how comfy and powerful the book superstores have become, 100’s of local boutique bookstores still thrived, but clearly needed to differentiate themselves and offer other services as a way for consumers to select content, get knowledgeable sales guidance and network with each other.   Local VARs are still going to be important in providing customer service in the same way.

Many loyal Borders customers were shocked at the company’s door-closing announcement. And, many local solution providers who aren’t yet building or partnering for IT managed services or cloud services will be too, when they miss the opportunity to lead the conversation with their longstanding customers about their journey to the cloud.   There are skills, customer insights and local touch to be leveraged here for the average solution provider.   But, it requires a healthy awareness of what’s coming down the pike and the potential power of the big service providers and corporate resellers to upend their sales process and IT cost-management conversation.

Vendors, we need to help the solution providers build, buy or partner for cloud services capabilities. There’s not only one right approach here. Otherwise they’re going to find themselves with great coffee bars, comfy chairs and racks full of product waiting for customers who aren’t going to come.

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Do or Die: To Cloud or Not to Cloud Getting Carried Away in the Channel

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