This reminded me of a term that I have used at various points over the last decade - "Horizon of Commodization." It is perhaps a little different twist on the concept as it applies to providing services.
My Horizon of Commoditization assertion is that there is a moving line between what buyers spend time thinking about versus buying as a commodity like milk or eggs. Such commodity purchases are often decided by cost alone, with relatively little weight given to differentiating features.
In the data center business, the march to cloud services is very much like this. People want to buy compute or storage without knowing the details of how it is built and operated. This approach has a number of implications:
- public cloud is dominated by companies with tremendous economies of scale
- decisions are made on price alone with much less attention to "details" like quality of service
- customers also focus little thought on where the computing and storage actually happen and the quality of network access to those points
The concepts of De-materialization and Commoditization have an even darker side. Does the person who uses their iphone rather than a traditional camera produce a better quality photo or video....probably not. Does the person that buys cloud without understanding design, performance, and reliability aspects serve their company well... probably not. There are still basic concepts that sit "behind the horizon" that need to be considered. As consumers we need to resist the temptation of these screens of opacity and make certain that what we are buying meets (all of) our needs.
So does this create a business opportunity for the companies providing these products and services? It has certainly worked for Apple on the product side, but how do we unlock the same treasure for a services business?