Biometric Technology Maturity And Strategies For Crossing the Chasm

By Michelle Shen
ePolymath.com

January 6, 2004

When will the biometric market click? Despite all the hype received in the biometric technology segment since 9/11, all biometric vendors continue to operate in an uncertain environment nearly two years later. If all the readiness for a market inflection is there, when exactly will the critical mass be formed? This article offers industry players a refreshing aspect of the technology analysis -- the biometric technology maturity and the adoption cycle. Biometrics is a typical case study of a technology trying to cross the chasm between initial adoption and critical mass. Strategies proposed at the end of the article will help biometric players bypass the technology pragmatists that slow the adoption and move forward rapidly into the mainstream market.

The maturity of biometric technology also follows the technology S-Curve pattern. The following model (Figure 1) is developed to illustrate the relationships among evolution, adoption cycle and maturity of the technology.

The first modern biometric device was introduced on a commercial basis over 25 years ago when a machine that measured finger length was installed for a time keeping application at Shearson Hamil on Wall Street.

The e-commerce boom in the 90s was undoubtedly a key technology growth driver. Increasing needs for identity management and security authentication over the Web attracted a lot of efforts to promote and utilize the technology. The first early mass commercialization occurred during this time, however, the growth of the technology during the 90s was modest simply because of the formative nature of the technology. It did not reach an exploitation point.

The tragic 9/11 event in 2001 and increased concern over security and new security legislation dramatically increased the visibility of biometric technologies. The technologies attracted investments from multiple sources and market entrants in different roles (such as hardware, solution and software vendors; system integrators; OEMs; etc.) increased exponentially. There was a small tornado formed during this period of time as many government-funded contracts were tendered and almost every international airport in the United States began investigating biometric technologies. However, the small tornado was formed at the expense of biometric technology vendors, with few of them being profitable: Vendors needed to invest substantially in R&D to maintain the pace of technological advancement in a market where superior functionalities were continuously being provided at reduced prices. By the time that these vendors were established in the market, they had become so highly leveraged financially that any hiccup would probably have thrown them into a tailspin, or, the so-called chasm.

With all the exposure biometrics received during this time period, the perceived value of biometric technologies has been dramatically increased (as illustrated in The Value to Customers Size of Customers/Market Share chart in Figure 2), and it is now seen as a lifesaver and a panacea for preventing terrorist attacks.

Looking forward, as most of the public sector contracts will likely be released in the next five years, the early adopters (here referring to adopters from public sectors) perceived value of the technology will continue to increase. These early adopters usually require the high flexibility and capability of biometric vendors to deliver complex and mission-critical biometrics solutions.

Although these customers are willing to bet on the outcome, if the biometric technologies fail to deliver on their promises, which will very likely be the case in the next five years, most of the biometric vendors will find themselves stuck in the chasm unless proper strategies are chosen to help cross the chasm -- and fast.

Possible strategies for vendors hoping to cross the biometric technology chasm include:

• Establish a beachhead with a niche whole product: In order to provide a completely configured biometric solution for a specific niche market, biometric vendors need to leverage their existing core competence/core technology/competitive advantage, recruiting partners to fill gaps and deepen the understanding of niche requirements. For example, as an industry leader, Identix leverages its IPS divisions relationships in the public sector and offers a whole product that includes citizen-facing and government employee-facing physical and network access control by partnering with more advanced sensor manufacturers.

• Leverage to adjacent markets or products -- the bowling pin strategy: Bowling pin refers to a complete solution which matches a specific application to a niche segment. Biometric vendors should aim to choose a market niche which is their own size and grow the market share within. The vendors should target business sponsors and users, not technologists. IT managers are typical pragmatists and are not yet ready to support this type of decision making.

• Continue extending until the main market tornado starts: This is the most expensive strategy for crossing the chasm, which means biometric vendors will keep adding features in the hope that early majority will bite. Unfortunately, this also reflects the cruel Survival of the Fittest theory, with a good number of vendors probably being squeezed out of the market. This strategy is usually adopted by well-established vendors with deep pockets and a wide network of strategic partnerships.

For more forward-looking biometric technology strategies for vendors in different roles, please contact Michelle Shen of ePolymath Consulting at [email protected].

Michelle Shen is a Consulting Manager with ePolymath.com. ePolymath Consulting is a strategic advisory and consulting firm that provides critical analysis and actionable advice through competitive intelligence market research initiatives to biometric security and other high tech industries, thereby helping them manage resources, assess and mitigate risks, and increase business value.

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