View

Ventana Research's IPM practice began with the recognition of an innovation value chain supported by an innovation business process. The value chain delivers ideas, deliverables and intellectual capital. The business process that supports this value chain is concerned with generating, converting and realizing innovation. The innovation management technology market supplies software tools and applications that support the innovation value chain and business process.

Overall, there is no leader in the innovation management technology market. This is because there is no one-product category that spans the innovation business process. For example, there is no innovation resource planning (IRP) product that compares with ERP or CRM. Consequently, there is also no significant representation in this market by industry leaders such as IBM, Microsoft, Oracle or SAP.

The market is classically fragmented into point solution "silos" partly because the innovation value chain and business process is not yet widely recognized and accepted. Many vendors are small, the applications and tools inexpensive and immature and there is little or no recognition of a value chain or process orientation as few applications bridge these silos, even in terms of importing and exporting data.

What is clear is that there are two high value "aggregation" points in the innovation management technology market and both are in what Ventana Research calls the innovation conversion activities of the innovation process. Currently the two most mature and high value types of applications (relative to acquisition/implementation cost) are ideation and PLM. Both are potentially enterprise level applications in terms of licensing value and both convert innovation into potential revenue.

Ventana Research believes the first attempts to break out of this silo mentality will come from ideation and PLM vendors who will look to enhance and extend their offerings as follows:

· PLM - extend down the chain to integrate ideation and up the chain to integrate brand and/or IP management.

· Ideation - extend down the chain to integrate awareness and creativity applications.

Ventana Research does not believe the current generation of ideation vendors are sufficiently funded or positioned to move up the chain to build or buy PLM functionality. Ventana Research believes takeover opportunities are particularly obvious in the innovation generation and innovation realization sectors of the market - the former by ideation vendors, the latter by PLM vendors.

Assessment

Ventana Research believes the innovation technology management market is about to undergo some disruptive innovation of its own as it begins to mature and break out of its current fragmented and silo orientation. Disruptive change will be driven by ideation vendors building or buying innovation awareness/creativity functionality and by PLM vendors building or buying ideation functionality and/or IP and brand management functionality.

Ventana Research also predicts that within a 2-3 year timeframe one or more major players, certainly including Microsoft and SAP, will move into this market but from different ends of the value chain and process. This in turn will trigger a race to create an end-to-end process management application or to consolidate this functionality into existing enterprise applications.