Charting innovations’ path along the ‘Hype Cycle’
About 40 per cent of the innovations it tracks eventually plateau; the others get stuck somewhere along the S-curve. When they start along the cycle, “no one really knows what people are going to do with it,” Raskino says.
He offers RFID (radio frequency identification) sensors as an example. Early on, it was a generic innovation with lots of hype around it claiming a huge variety of uses. Later on in the Hype Cycle, it is better understood and has narrower applications in areas such as retail (for tracking products in warehouses or on the shelves).
Gartner uses stock market activity, citations in various media, and client enquiries to help position an innovation in the Hype Cycle by determining the general confidence level in the innovation at a given time.
Raskino adds that the curve applies to management innovation as well as technological innovation, pointing to CRM (customer relationship management) “as a management technique as much as a technology.”
“From a CEO point of view, (when they think of the technology) they’re really thinking about management innovation or the business technologies that come out of that. So I talk in terms of special strategic capabilities.”
Hype Cycles can last anywhere from 10 to 30 years, he says. CRM lasted about 20 years in the cycle before becoming a norm in business. It first appeared in the 1980s, though he cites American Airlines’ frequent flyer programme in the 1990s as a first real application of the idea. “CRM then left the cycle around 2005,” he says.
Some things never emerge from the Trough of Disillusionment, which can be “a trough of complete denial”, he says. Sometimes the name of the technology or innovation changes as it emerges from the Trough, especially if it was overhyped or got a bad initial rap. ASP (application software provider) is better known now as the far trendier and accepted SaaS (Software as a Service), for example, while Raskino notes that 3D printing is beginning to be described as “additive manufacturing”.
But the Trough can also be a place of transformation – businesses which take their eye off innovations in the Trough and abandon investments can find themselves behind their competitors if the technology emerges successfully. He points to food retailers which invested in web commerce and loyalty card schemes (a good move) compared to those who did not.
The Trough is also where industry consolidation begins to happen around given innovations and technologies.
If an innovation is named in a way that clarifies its impact on a business, it seems to gain more hold, Raskino says. He contrasts CRM or SaaS with current Hype Cycle innovations such as “cloud computing”, “big data” or “mobile”.
“There’s no competency, no management technique, no ‘there’, there,” he says. “Cloud – cloud what? ‘Cloud computing’ – it’s still: ‘what?’ I think they may have suffered because they’re not being properly crystallised, and so they’re stalling through the Hype Cycle.”
The same happened with WAP – wireless application protocol – a few years back, he says.
He places both cloud computing and big data at the top of the Peak of Inflated Expectations right now. “Mobile” as a general term is beginning to climb the Slope of Enlightenment, while “Social” is entering the Trough. The Internet of Things is about midway up the climb to the Peak of Inflated Expectations.
Which is doomed to languish in the Trough, or set to attain triumphantly the Plateau of Productivity? Check back in a decade or two as they complete their Hype Cycles.