When discussing innovation, most people focus on advances in technology.  Technology is important, but it is only one of three key components required for innovation.  In order to maximize the opportunity for successful innovation, one must combine the following:

A customer problem or opportunity

Domain knowledge

Advances in technology

Innovation Key #1: Customer Problem or Opportunity

Innovation only moves forward if someone is willing pay for it, and that only happens if it provides some tangible benefit.  There are countless examples of “great” new products or services that were unsuccessful because nobody would pay for them.

How do you identify what someone is willing to pay for and what the value is?  The best way is to talk to the potential end users.  In my view, a deep and long-standing relationship with customers is an innovator’s most valuable asset.  This is because it enables the innovator to identify and understand important issues or opportunities.  In addition, delivering an innovation to a current customer has a much higher chance of success than to converting a new customer.

Of course, simply listening to customers may not be enough.  The quotation “If I’d asked people what they wanted, they would have asked for a better horse” has been attributed to Henry Ford.  It may be apocryphal, but the point is valid.  Ford’s innovative solution was not exactly what the customer thought they wanted.  However, it did solve a problem and turned out to be a solution they were willing to pay for.

Innovation Key #2: Domain Knowledge

I have been fascinated by who actually delivers the new innovations.  Is it the new technology experts, or the domain experts from the field into which the solution will be delivered?  I believe the latter has a higher success rate.

Opportunities for innovation are often revealed when an emerging technology from one field is applied to a problem in a different field.  This innovation requires a working knowledge of the new technology, but more importantly, it requires domain knowledge of the target opportunity.  This notion of domain knowledge is very important to my company, Overture as we apply new technologies to some difficult problems faced by our communications service provider (CSP) customers.

As an example, let’s take a look at one of Overture’s most forward-looking CSP customers.  Their back office software systems were traditionally viewed as a burden – actually an impediment to their service innovation.  But a visionary on the team recognized that by applying technologies from modern software and cloud systems development, they could turn this asset into a competitive advantage.  While the usual approach would involve hiring a bunch of consultants or a system integrator to overhaul the existing systems, our customer took a different approach.  The customer realized if they trained their current network architects in the new technologies, they could leverage the team’s deep and wide domain knowledge of networks, applications, services and customers.  The CSP could still bring in outside help where needed, but they never lost sight of the goal – delivering services, not implementing technology.

Innovation Key #3: Advances in Technology

Technology advances enable new solutions to old problems or emerging opportunities.  For communications services, those new technologies include Software-Defined Networking (SDN), Network Functions Virtualization (NFV), cloud and virtualization.

SDN promises programmable networks, standard protocols for communication to network elements, and a centralized control plane.

NFV replaces proprietary fixed-function appliances with virtualized software functions running on commodity hardware.

Cloud and virtualization provide scalable pay-as-you-go services built on common and low-cost hardware and leverage a large ecosystem of software and development tools.

I see lots of folks coming at service innovation from the technology direction.  This is a flawed and very limiting approach.  At Overture, we believe that these new technologies are important, but they must be guided by domain expertise to solve real problems.

Bringing it All Together

At Overture we are going through a company transformation.  We are changing the way we innovate and the solutions we bring to market.  We are moving from a business that creates communications products to one that delivers solutions stemming from an architecture that accelerates service creation, activation and assurance.  Doing so requires we leverage our deep domain experience in CSP requirements for multi-service Carrier Ethernet at the metro service edge.

The technologies of interest include SDN, NFV, cloud and virtualization.  When we began this transformation over a year ago, we didn’t have much experience with these technologies.  We had to acquire it through hiring and training.  However, it is our domain expertise and customer relationships that enable us to help solve real problems and support new opportunities.

It is not impossible to deliver innovation without having domain knowledge or customer relationships.  But delivering innovation is hard enough without that handicap.  With a strong understanding of the domain and the customer problems, you maximize your chances of success.