Is Digital Signage Software Becoming a Commodity?

Posted by on Mar 11, 2011 in Pontifications, Software

This question becomes quite compelling especially as differentiation between various sign software offerings decreases over time. As technologies and products mature, there tends to be a real shake-out as to when particular products enter the market. It would be good to define what a commodity actually is. Wikipedia defines a commodity as “a good for which there is demand, but which is supplied without qualitative differentiation across a market.” My question is, are digital signage software packages becoming a commodity? What happens when products become commodities and what can we do to work on extracting as much value as possible when they do?

With differences in feature-sets becoming negligible, how does one work to find what service is the best? Are there methods to see which product stands out? Here are some ideas. Take them as you will.

1. Differentiate your service. There must be a reason to believe. Does your software company actually provide more bang for its buck when it comes to regular and accessible service to its customers? Can you say that you have 24X7 support.

2. Have a proven track record. This takes time, but as technology becomes a commodity, it remains more difficult to break into a market where mature players have been working for years, establishing a brand, working out software bugs etc. Microsoft and Google have been called monopolies, but the real issue is that they were able to recognize economies of scale fairly quickly. Once this is done, it is often difficult or impossible to play catch-up (unless of course you are Google playing catchup with MSFT by building Chrome OS– in that case you have a greater chance of success). This reputation piece could mean the company is public (in that case the dirty laundry is on the line) or private with plenty of referrals.

3. Direct sales. I have always been a proponent of the direct sales method. If you get your mug in front of other faces, you will be able to more quickly penetrate the market and thereby succeed in front of the obstacle of commodities. Why do you think the stock exchange still involves people? If everything were completely automated, there would almost be no need for people at all.

Is software for digital signage quickly becoming a commodity as time elapses? Is there enough reason to believe within the industry that makes others believe packages and performance is different? My guess is that there is not enough reason to believe there is too much differentiation across providers to make a believer out of people.

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