No formulation of market strategy would be complete without factoring in the coming tidal wave that is WPF or Windows Presentation Framework to use its full name. Although still a year away from release it will become the next generation platform for user interface development on .NET and Windows.
Market Disruption
WPF does not represent an evolution of the existing technology used to develop user interfaces but instead a revolution. Moving from .NET 1.1 Windows Forms to .NET 2.0 Windows Forms represents an evolution and a welcome one at that. But WPF is a completely different way of developing with a learning curve that brings everyone back down to the same starting point.
This completely disrupts the market for .NET user interface components. You cannot just upgrade your existing component code and add a couple of new features to keep it up-to-date. If you want to develop controls for WPF then you are starting from ground zero.
The clock is ticking on the revenues that your existing Window Forms components will generate. This is hardly surprising as all technology is superseded at some point but until WPF was revealed we did not know when it would happen. But now we can look ahead and predict very easily what will happen.
I think I am safe in saying that in 10 years time everyone doing .NET windows development will be using WPF. In fact we can move the prediction ahead and say that in 5 years I think it will be true also. So how much nearer can we predict? How about in 3 years time or even just 2 years?
I do not know the exact release date for WPF but I think it will be about the end of this year. The exact timing does not really matter that much when looking at the market over the next few years, a month or quarter either way is no big deal.
Once the technology is released I think it will take at least a year before companies starting a new project decide to use it as the front end technology of choice. Some bleeding edge developers will jump into using it straight away but most managers are cautious about a new technology.
So we are one year away from its release. Two years from now it will be getting a good percentage of new projects using it and in three years it will be adopted as a matter of course. Therefore any revenue you have for Windows Forms components is going to start declining one year from now. Two years from now the revenue is going to be a significantly down and declining rapidly. In three years you will need to be selling WPF components or starting to look for another job.
Look back at what has happened to the market for ActiveX/COM components. Although some are still sold to those still using VC++ the sales are minor compared to the money spent on .NET components. If anything the transition to WPF components will be even faster because the transition from Win32/VC++ to .NET was a greater leap than that from Windows Forms to WPF. After all, WPF is still using .NET.
The Levelling Effect
Whenever there is a big change in a market it also represents a big opportunity. Take as an example the component suite market. Take the position of Developer Express as compared to the market leader of Infragistics.
The first disadvantage for Developer Express is only having half the number of developers of the market leader and so they are constrained by resources. Man for man they need to be twice as effective in order to maintain the same development pace as the Infragistics team. A second disadvantage is that Infragistics already have many more components than Developer Express does. If Developer Express wants to appear as an equal player in the market they need the same breadth of components and so need to catch up. They need to sprint with only half the staff to catch up.
Now let’s press the market reset button by introducing WPF. Disadvantage number two has completely disappeared because both companies are starting from a clean slate. The problem of fewer resources is certainly not insurmountable. A smaller team that is highly motivated and talented can outstrip the productivity of a much larger team.
If I was Developer Express and my ambition was to compete with Infragistics as a suite vendor then I would put all my existing .NET and VCL components into maintenance mode. All my best developers would be spending their time mastering WPF and ensuring that the team can develop and release components at the same tempo as Infragistics.
So my advice to Developer Express, ComponentOne, Syncfusion, and any other vendor looking to play ball with Infragistics is to master WPF as soon as possible. Make sure that when WPF is released your out of the traps like a whippet because if they get ahead of you, its game over until the next technology reset.
First Mover Advantage
For a full description of first mover advantage you can use this link to wikipedia. If you think back to the days of the dot com bubble you will probably remember that many of the companies based their entire business model on first mover advantage. They viewed the internet like a land grab, the first company to offer a particular service was just bound to dominate and make most of the money.
Looking back it is obvious this approach is far from fool proof. Amazon was not the first book seller online and depending on which account you read was either the 3rd or the 7th. Either way it was certainly not the first. Google was hardly the first search engine but look at it now.
If you’re a high street retailer then having the very best location on the street is a great first mover advantage. No rival can do much about that. So if there are scarce resources then being a first mover can be a big advantage. But resources on the internet are almost limitless. Anyone can register a domain name and the cost of hosting a moderate server farm is not that great. You can always hire some smart developers and have a spiffy looking website up in no time.
The only real advantage you gain with respect to the internet is in markets that have a network effect. This is best described with an example. In the UK there is a website called www.friendsreunited.co.uk that allows people to find old school friends and find out what they have been up to. Now there is really only room for one website to do this as no one wants to logon to several different sites. So once they had a core group of users then everyone else just migrates to that one location.
So will first mover advantage apply to the WPF market? I think the answer is both yes and no. If you are an established number one player in your category then I think it makes sense to be the first to market. Try and ensure that no one has a reason to switch over to an alternative supplier.
Let’s consider the position of our favourite example Infragistics. They have a dominant position and substantial revenues from subscription renewals. Their priority must be to ensure that do not give any of their customers an excuse to switch over to someone else. So they must be quickly into the market and establish themselves again as the provider of the broadest range of components.
Hence my previous belief that the best chance for the other suite vendors is to quickly get into the market and use the levelling effect described above to try and attack that dominant position. I would use the same advice to any dominant player in the more specialised categories. So SoftwareFX and Dundas in the charting category should quickly move to maintain their positions as leaders in that area.
What about the rest of the vendors that are either minor players in their market or just starting out like me? In that case I would suggest they consider using the second mover advantage instead.
Second Mover Advantage
For a description of second mover advantage use this link, again from wikipedia. This is not a term that most people will have come across but is actually a very good strategy for many technology based companies.
Until now we have suggested that Developer Express et al try to quickly establish themselves in the WPF market to counter Infragistics. But what if they feel they just cannot manage it on the scale required. Instead they could deliberately not enter the market and wait to see what Infragistics does with the first release of their own offering.
By examining the Infragistics components they can learn all about the architecture and design decisions that Infragistics have taken and improve upon this with their own set of ideas and innovations. So although they are behind in terms of time to market they have a superior product that has leveraged the research and development effort of the leading competitor.
This approach is particularly appealing if you are just starting out or are a small player in a market you want to attack. You can leapfrog the capabilities of your competition. Now in theory you would expect the other company to respond by improving their own product and so begin a feature lead arms war.
What is interesting about Infragistics is that they do not tend to make big investments in improving their existing products. Oh, they do tweak and add the occasional feature but they will not completely rewrite a major component. If you came out tomorrow with a fundamentally better grid control that they could not match without redesigning the whole of their own grid, it is unlikely they would respond.
Final Strategy
I expect the WPF market for .NET user interface components to develop in the following way.
Infragistics will be keen to retain all their existing subscribers and defend their dominant market position by releasing as early as possible to the market and develop a broad set of components. Don’t let any of those subscription holders defect!
Other suite vendors will take one of two strategies. I expect most to release early in the hope of matching Infragistics component for component in an effort to increase their market share. Others, if they have the financial resources, will wait and leverage the research and development of the early releasers in order to leapfrog and bring superior technical solutions to the market later.
In the specialist categories I would expect the market leaders to also release early for the same reasons that Infragistics will do in the suite market. The smaller players will probably split between the two approaches but many will not even have thought about strategy.
Component Factory is going to take the second mover approach and deliberately wait for others to release products before designing the architecture of our own. Obviously I will be learning WPF and thinking about lots of ideas of how to create some compelling components. But the final design for them will wait until I can learn from and take advantage of the ideas others have come up with.
So what will I do for the next year or so until the time comes for serious WPF development? That time will be spent between mastering WPF and developing good old .NET2 Windows Forms controls. Although WPF is the next big wave there is still life in the old Windows Forms dog yet.
