Gartner Reveals 2016 Cool Vendors Are Turning 'DigiFlip' to Their Advantage

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CIOs and IT leaders realize that disruption will become the norm as the flip from the predigital universe to the digital universe occupies strategic thinking for years to come. Gartner Inc.'s 2016 Cool Vendors research examines digital disruptions and potential disrupters that will change our relationship with technology forever.

Gartner's 2016 Cool Vendors research profiles 456 Cool Vendors in 98 reports. Many of these providers are exploiting digitalization and the Internet of Things (IoT) to build the next generation of innovation. This offers unprecedented opportunities to exploit new business models, compress cycles of insight and get to business outcomes.

Gartner's definition of a Cool Vendor is a small company offering a technology or service that is:

• Innovative — enables users to do things they couldn't do before.
• Impactful — has or will have a business impact, not just technology for its own sake.
• Intriguing — has caught Gartner's interest during the past six months.

"Up until now, the results of the digital revolution have been varied. In some cases, such as with IoT, advancements have caused great shifts in both technology and business, while in others, it has caused more struggles to emerge," said Darryl Plummer, vice president and Gartner Fellow. "For example, with all of the new customer data being generated and collected, organizations are striving to find the line between a personalized customer experience and one that customers feel violates their privacy. This is but one indicator that the flip to digital — or "DigiFlip" as it is sometimes called — is not a simple transformation but is instead a complex relationship of digital and nondigital opportunities."

In order to reduce the complexity of digital concerns, it is important to distinguish between three types of innovation that happen periodically — features, fads and disruption:

Features: When a technology provider adds technology features to a new product, it often spurs changes in the way that technology is used or what it does. For example, Microsoft has historically added many new features each year to its Office suite. However, not all of those features are used by Office customers. Nonetheless, the breadth of features in Office has helped to cement it as a leading workplace collaboration suite. But, when viewed from a change perspective, the changes brought about by the cumulative addition of features tends not to be disruptive, but evolutionary.

Fads: Fads are short-lived bouts of excitement about something where the excitement is seldom rooted in the intrinsic nature or quality of the subject of the fad. As such, they come and go without long-lasting impact beyond the memory of the fad. Surprisingly, some key digital disrupters have sponsored and subsequently destroyed fads. Apple is considered to be a disrupter but the use of certain Apple offerings have yet to be shown to be more than fads. The shifts they are associated with, however, come from more fundamental areas of concern.

Disruptions: "These kinds of disruptive changes can shift assets, channels and capabilities of entire industries," said Mr. Plummer. "Whether feature-focused, fad-obsessed or disruption-bound, CIOs, IT leaders and their technology provider counterparts cannot ignore the effect of the new digital landscape."

Since Gartner first introduced the Cool Vendors report in 2004, more than 2,900 Cool Vendors have been profiled. A few Cool Vendors have gone on to become IT megavendors in their own right, while others have been acquired by megavendors and other industry stalwarts; however, some have simply disappeared from the radar. While the 2016 collection of Cool Vendors is not exhaustive, Gartner analysts have selected some companies to highlight based on their sense of how impactful they are today and can be in the near future.

Disruptions, particularly digital disruptions, cause a fundamental shift in the quality or essence of the subject of the disruption. They have a longevity that goes beyond the excitement of a fad and they cause ripples that change both near- and far-neighbor issues. For example, the introduction of digital TV and HDTV was a planned effort by broadcasters, content distributers, device manufacturers and governments, which fundamentally shifted the way in which video content was planned, generated and delivered. This kind of shift generated ripples that led to the emergence of Blu-ray (over HD DVD) and the subsequent emergence of streaming video over DVD formats of any kind. The fundamental shift caused new behavior patterns to emerge that have proven resilient.