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This is goodbye. After 26 issues and five fascinating years, Context is closing up shop. The advertising environment is just too tough, especially for a magazine that, like ours, depends on information-technology companies for support. We’ll miss you. We hope you’ll miss us, too. The work of the magazine will continue, however, through the consulting practice at DiamondCluster International Inc., our publisher, which was founded eight years ago on the same premise as the magazine: that technology is increasingly determining businesses’ strategy. The magazine’s work will also be carried on by those of us who are moving on to write for other publications or to produce books on the sorts of topics that Context has focused on. Our belief in the power of technology was controversial when we started this magazine, and it is now out of favor following the dot-com crash and the weakening of the economy. But it has to be right. Computing power has grown exponentially and produced a whole new class of computers roughly every 10 years since the 1950s. There is no reason to believe that progress will stop or that inventive people will stop using computing power to make businesses more efficient or to seduce multitudes of consumers. How can we be so sure technology will drive business strategy for years to come? Because Context has always been about viewing business through the prism of technology and we’ve been right far more often than we’ve been wrong. In Context’s third issue, DiamondCluster Fellow David Reed wrote that telecommunications companies were kidding themselves about the valuations of their aging equipment. Lately, the companies have been announcing huge writeoffs. Qwest Communications International Inc. (www.qwest.com), alone, is taking a $34.8 billion write-down that is wiping out its book value. We extolled the technology-based strategies of Lands’ End Inc. (www.landsend.com) and REI (www.rei.com) long before it was generally accepted that they would be among the most successful at integrating online and offline retailing operations. We criticized Merrill Lynch & Co. (www.ml.com) for being too slow to adapt to the new cost structure that online brokerage was forcing on Wall Street. We predicted the outright failure of online-only bank Wingspan, even though at the time it was the hottest thing going. Does anyone even remember Wingspan? In early 2000, when we printed the feature “The Awful Truth About Start-Ups,” Silicon Valley types warned us that we were wrong in thinking that lots of dot-com start-ups were based on amusingly bad ideas and would fall “faster than leaves in an autumn breeze.” The article looks spot-on now. Articles in Context raised the prospect of intriguing new ways of doing business that are, in fact, coming to pass. One piece, on what we called dynamic pricing, described how companies were going to start changing prices on the fly based on such factors as who the customer was and how much inventory was on hand. That concept has now spread well beyond airlines and hotels and has reached grocery stores, where it is being used to price even the most mundane items. Another piece talked about how sensors could be put in all sorts of equipment to spot problems before they even occur. Sears Roebuck & Co. (www.sears.com) is now testing whether it can greatly cut the cost of service calls by having chips tell it precisely what has gone wrong with its washing machines, ensuring that service reps can fix the problem on the first call and not have to go back. Interviewed back in early 1999, Microsoft Corp. Chairman Bill Gates (www.microsoft.com) said that the Internet was overestimated two years out, but underestimated 10 years out. That concept could just as easily be applied to technology in general. The business world may have gotten ahead of itself in the late 1990s in thinking about how technology is changing business, but now it’s making the reverse mistake. Technology is going to have an even more profound impact on business in the future than it has in the past. We hope you’ll be ready. Cheers, Paul B. Carroll |
