Did you know that Microsoft supported it’s product Windows XP until last year (2014), a staggering 12 years? Here’s why legacy support is even more important for online businesses.
The Internet – Thousands Of Products Come And Go In Just 1 Year
I started making serious money in 2010. Some of my earliest online ventures including web articles and services still make me good money to this date – after 5 years!
5 years on the internet is a lifetime. Internet years are quite similar to cat years. The progress on the internet happens extremely, extremely fast.
Google is closing and opening many products in a single year and conducts hundreds of search engine experiments in a single year, but major industry trends usually play out over 5 to 10 years from initiation to the level of “inflated expectations” to the “plateau of productivity”. It is important to understand that web trends rarely simply vanish.
This graph is one of the most important for business owners to understand how trends usually play out. If someone had shown this to me years ago, I could have avoided a lot of bad investment decisions. If you really want to become better at investing and growing your company, you better make sure you do some proper research on the Hype Cycle.
Growing Web Assets: All About Legacy
If things change so quickly and make old solutions obsolete so quickly, why then is legacy support something I should care about? Due to the extreme changes you have to keep your products up to date. Almost all of your work that you’ve done over the years is ‘reusable’, it just requires an upgrade to modern standards and industry changes.
Your trending software product you wrote in high-school may be totally outdated these days but you’d be surprised how many trends re-occur just years later and how old products can become important again. By providing legacy support you can keep a stake in an industry. Trends behave like rollercoasters and usually a rollercoaster has several ups and downs, not just one. Web trends may also follow an “elliot wave pattern” (a trading theory that assumes stock prices move in waves that allow for accurate forecasts). Research into this subject might prove useful to analyze web trends, something I hope to get more into myself. At the moment I rely on Gartner’s research reports which are incredibly helpful, not just for investing activities but for evaluating a company strategy.
Website owners have to come up with strategies to upgrade their websites and integrate new trends and industry changes into their overall business strategy. I always followed my intuition to grow my business, but being pro-active and doing your research before the markets change will allow you to cash in on those changes instead of being ill-prepared and having to deal with declining revenue.
The Other Approach: Swift And Nimble
I closely observe companies like Microsoft and Google to see what they are doing. Google does not shy away from closing products or ending support for major products such as Google Glass. They are swift and nimble. That’s part of their strategy. Microsoft used to be this slow goliath, but they too are becoming nimbler: By focusing on the cloud at the right moment Azure got a lot of traction. By integrating everything into one experience they leverage their exposure to different markets.
Image: Microsoft Cloud revenue growing faster than AWS revenue.
As every company knows, legacy support can be expensive. The costs for keeping up product support can eat your profits up. Not a good thing. So, selling off products and web assets you no longer need can be a viable strategy.
As you can see there are always pros and cons. In general, smaller companies would do well to keep a stake in different industries and assets. You never know when a trend re-occurs or how easy it would be to turn an outdated asset into a money-maker. The larger your organization the more problematic it gets. Legacy support may be an expensive strategy for corporate conglomerates, but small business owners may want to use that strategy to their advantage.
As always, keep an eye on your ROI. If your business is also your hobby (you love what you’re doing), keeping outdated products up to date can be a ‘fun’ activity to integrate into your workflow and maybe even pay off big time years down the road. The downside is that you may spend time on something that is not economically productive, but sometimes it’s not about being efficient, it’s about not getting bored. Creative people simply require a distraction from time to time and this too can become part of your strategy.
Owning 2 different web assets in 2 different niches e.g. B2B and B2C will diversify your business and make sure you don’t die of boredom. One of the few luxuries small businesses can afford and which sometimes make a lot of economic sense.
Further Reading Material
Something I hope to delve more into is change management and adoption rates. I find it fascinating how external events can upset an entire industry within weeks and how difficult innovation is once you’ve grown your business past a certain point.