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Where Have All the IP Vendors Gone? Part 2: Market Maturation
Well, we have answered the first question about market growth, now how about market maturation?
Market maturation can be viewed in two ways:
- The dynamism of the market slows and becomes moribund, something like you would see in the steel industry. Innovation slows to a crawl or is even nonexistent and companies are only treading water from one financial period to another.
- The range of business models starts to coalesce around fewer and fewer types as companies figure out what types of models are acceptable to customers. Sometimes this is driven in part by legal actions of one type or another. Sometimes one or more market leaders emerge that have good business practices, show sustained profitability and whose management practices are copied by others as being examples of how to service and thrive in changing market conditions.
Semico does not think anyone would say the 3rd Party IP market resembles the steel industry in any way today. There is tremendous innovation evident in the market today and it is occurring at multiple companies across multiple product lines. This is not a picture of a market that has lost its dynamism. If anything the 3rd Party IP market exhibits the opposite characteristics of increasing innovation and new product creation. Just witness the introduction of IP Subsystems as an example of innovation and new product ideas. These types of new products allow the customer base to explore new applications and to aid in the potential creation of new markets, aiding both groups in the long run.
If market maturation is occurring anywhere it is in the adoption of better business practices across multiple companies and a focusing in on what customers expect from their vendors in the areas of quality, service and product deliverables. In Semico’s estimation this is a good trend and not a bad one at all.