Consumerization is the tendency for businesses to purchase more consumer products and services with time. It is common for a product to be first introduced as an expensive business good that is beyond the budget of most households. With time, consumer versions are introduced and rapidly improved. The price of the consumer version may fall rapidly due to competition and economies of scale. When this occurs, the business version of the product becomes a comparatively poor value and businesses begin to adopt the consumer versions of the product. The following are illustrative examples.
RefrigeratorsAs early as 1861, several commercial refrigerators were in operation. These were large custom built machines that were sold to breweries and meat packing houses. It wasn't until 1913, that consumer versions of refrigerators were first launched. Prices fell and the technology was rapidly improved such that small businesses began to purchase consumer refrigerators. Business refrigerators began to resemble the consumer models with greater capacity.
Microwave OvensThe first commercial microwave oven was available in 1947 and the first home microwave oven in 1967. Eventually, business models for restaurants began to resemble the consumer product.
TelevisionsDigital commercial signs such as those that display flight information at an airport were often replaced by large flat screen televisions beginning in the 2000s. As prices fell, it became possible to use this consumer technology to build large signs and digital billboards.
Early commercial computers were large, expensive and power hungry. These were well beyond the budget of households. In the late 1970s, computers began to make appearances in the home. Businesses began to adopt consumer computers for desktops in the 1980s and consumer computers for servers in the 1990s. In the 2000s, cloud computing emerged as a method of using many cheap computing units as a common resource. This dampened demand for high-end computers designed for business systems.
Mobile DevicesEarly mobile phones and pagers were primarily purchased by businesses. As their price declined in the mid-1990s, these devices began to be designed for the consumer market.
AppsAs employees began to bring their own smart phones to work, they began to use cloud-based apps to accomplish tasks. Software designed for consumers began to replace far more complex business applications for many common tasks. Software firms began to shift to a software as a service model such that business software was fully hosted in the cloud with a mobile app user interface. This changed the way that software was sold as many software companies had success by-passing the IT department and selling directly to business units.
NotesConsumerization is related to digital convergence, the process by which many technologies become one.
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