Jeez. Just when I’m getting comfortable in my hammock, Boeing goes and pulls the plug on its in-flight internet service. My wife and kids are going to laugh at me – bloggers are ridiculous people – but, dammit, I can’t let this one fly by unremarked.
Boeing’s failure is a perfect example of something I’ve called “outflying the market.” A company, or an entire industry, gets caught up in the excitement of a new technology and massively overestimates the demand for a new product or service. It finds out, after making a big investment, that most of the expected customers don’t particularly need the new offering – not enough to pay the going rate, anyway. Another great example, also from the aviation industry, is the Concorde supersonic jet, which despite being one of the great technological marvels of the last century failed to find sufficient demand in the marketplace. This kind of misjudgment about people’s desire for new technologies, or at least about the pace at which they’ll adopt new technologies, also lies at the heart of the recent dot-com bust and telecommunications meltdown.
Demand for in-flight internet access, and a successful business strategy for supplying it, will probably materialize in the future, but in the meantime Boeing has lost a load of money. When it comes to technological innovation, getting too far ahead of your customers is every bit as dangerous as falling too far behind.
By the way, this is a serious setback to companies looking to supply personal productivity software as a service over the internet. The lack of in-flight connectivity is a huge barrier to business people’s adoption of such services. As long as it exists, no meaningful segment of the market is going to abandon the copies of word processing and spreadsheet and presentation software they have installed on their laptop hard drives. So this is bad news for Google and the Web 2.0 newcomers and good news for Microsoft. As long as barriers to continuous connectivity exist, Microsoft gains time to move its huge customer base to its own on-line services. Don’t underestimate the powerful advantage of having the ability to provide a hybrid of traditional installed software and software-as-a-service.
I wouldn’t be at all surprised, in fact, if Google ultimately moves in to subsidize in-flight internet service in some way or another. It’s got a lot of capital to invest, and it seems more than happy to invest it. So why not a free Google Sky-Fi service supported by ads?