Generic becomes the 'it' brand
In recent years, brand has been all-important for both enterprise and consumer technology62. Few companies have dared risk experimenting with lesser known, untested suppliers.
Consumers, spurred by billions of dollars of advertising, have sought out and paid premiums for the best brands, even if these may not have offered the best products.
In 2009, companies and consumers may actively seek out unbranded or relatively unknown technology brands on the basis that they are good enough and, more importantly, significantly cheaper63. Similar to supermarkets' shift in focus to own-label value products, retailers and manufacturers are likely to adjust their product lines to be aligned with new economic realities.
For enterprise software and technology, companies are likely to become more willing to try out cheaper alternatives to their current suppliers. This reaction is similar to that of many companies' annual reversion to generic stationery at the end of a financial year. Linux, software-as-service (SaaS) and cloud-based storage may all get greater consideration than in previous years on the basis of their lower prices64.
As for communications technology, employees may find themselves issued with standard voice phones given that the majority of business usage is for voice calls. Voice-centered phones can cost as little as tens of dollars. This compares with hundreds of dollars for smart phones. Small and medium-sized companies may consider consumer variants of VoIP more carefully in order to minimize their phone bills65.
In good times, great gadgets, replete with functionality of questionable business benefit, may have been part of the package required to attract the best talent into a company. In not so good times, the best talent is likely to be quite willing to remain attractive to their employers, even if this means using basic devices. Some companies may ultimately regret changing suppliers, but for others the shift will be permanent. The immediate, quantifiable, cost savings from changing suppliers may be outweighed by the harder-to-measure costs of adjusting to the new technology.
Bottom line
Technology device manufacturers must consider how the impact of branding is going to change in the face of a downturn. A brand that once stood for quality, reliability and even desirability may come to represent extravagance.
As enterprises and consumers aim for frugality, a formerly attractive brand may become a liability. Device manufacturers may have to consider creating low-cost or generic brands, a strategy that has worked well in other sectors. But for premium brands, the optimal approach may simply be to suffer a near-term slump in sales. Dropping prices may increase sales in the shortterm, but might cheapen a brand's image in the long term.
Enterprises considering changing suppliers should consider the longer term view and undertake a medium-term cost benefit analysis that factors in all possible costs. Some companies may find that while open source software may appear cheaper, in some cases it may be harder to attain redress in the case of problems. If a supplier's reputation is based on price, not quality, it will have less incentive to resolve issues.
Using alternative suppliers is also likely to require users to become familiar with a new interface, causing a drag on productivity. Enterprises should look at approaches of minimizing this disruption, for example through the use of digital skins that mimic interfaces and appearances that users are more familiar with.
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