Charting innovations’ path along the ‘Hype Cycle’

The exhilaration felt at the “Peak of Inflated Expectations” can be cruelly undone down in the “Trough of Disillusionment”, but hope lies ahead on the “Slope of Enlightenment”.

No, these aren't the mutterings of a mystical guru, but – as millions know who read about or run technology companies and use or create their products – the disconcerting ups and downs of the famed Gartner Hype Cycle.

And, sitting in a room in Dublin, is Mr Hype Cycle himself, Mark Raskino. He's a vice-president of research and a fellow with analyst Gartner, and the man who co-wrote, with Jackie Fenn, Gartner's book Mastering the Hype Cycle.

It all began back in 1995, when analyst Fenn started to notice that new technologies tended to move through a cycle. There would be a rise in interest and media coverage, then a fall, and often, a disappearance. A year or two would go by and she would notice them start to reappear again.

Thus was born the rise-fall-rise curve of what would be dubbed the Hype Cycle – possibly one of the best-known images to appear in presentations and reports about new trends and technologies.

“Over time, we developed the curve shape, and over the years, we have refined it,” says Raskino.

Plotted on an x,y graph that measures expectations (y) against time (x), the hype S-curve starts low, with an “Innovation Trigger” (when the technology or innovation begins to gain market traction). The curve then rises fairly steeply to the hardcore hype of the “Peak of Inflated Expectations”, before tumbling steeply down into the dreaded “Trough of Disillusionment”.

As time passes (and assuming the innovation doesn’t drown in the trough, never to reappear), the innovation then begins to gradually ascend the “Slope of Enlightenment” before finally reaching mainstream success – or the “Plateau of Productivity”.

Where did the names come from? “Well, my colleague admits she was reading the Lord of the Rings at the time,” he says with amusement, but the terms were meant to raise an “ah-hah” smile as well.

Two elements compose the curve, says Raskino: “First, a wave of social excitement, of rising, falling fad. People get really excited about a new innovation, then it dissipates. Second, is penetration utilisation. There’s a long initial tail of initial adopters, then they ramp up, then they tail off.”

They thought “long and hard” about what the y-axis was, Raskino says. Did it represent visibility over time? Eventually, they concluded “visibility is a symptom of what is going on – so we have named that (axis) ‘expectations’, though you might more accurately say, ‘future expected value’. It’s people’s belief in the future expected value of the thing.”

The Hype Curve is specifically used for plotting innovations, though people have used it in many other contexts – foods, medicine, even love. “Some have said, that’s how relationships go,” he laughs.

Gartner applies it to technological innovations – though not specific products. So Gartner will track mobile commerce, but not the iPhone; cloud computing as a concept, but not specific component products that enable it.

Comparing innovation
"The purpose is to compare and contrast innovation, to help [companies] decide what you want," he notes. "Our analysts give an estimated time to plateau," the point where an innovation is considered to be well understood, where expectations have leveled off, and it is considered to be "pretty much de-risked".

Several innovations are plotted on a given graph, “so things are moving to plateau at different times”.

Gartner published 90 Hype Cycles last year, and it has 1,963 item profiles.

About 40 per cent of the innovations it tracks eventually plateau; the others get stuck somewhere along the S-curve. When they start along the cycle, “no one really knows what people are going to do with it,” Raskino says.

He offers RFID (radio frequency identification) sensors as an example. Early on, it was a generic innovation with lots of hype around it claiming a huge variety of uses. Later on in the Hype Cycle, it is better understood and has narrower applications in areas such as retail (for tracking products in warehouses or on the shelves).

Gartner uses stock market activity, citations in various media, and client enquiries to help position an innovation in the Hype Cycle by determining the general confidence level in the innovation at a given time.

Raskino adds that the curve applies to management innovation as well as technological innovation, pointing to CRM (customer relationship management) “as a management technique as much as a technology.”

“From a CEO point of view, (when they think of the technology) they’re really thinking about management innovation or the business technologies that come out of that. So I talk in terms of special strategic capabilities.”

Hype Cycles can last anywhere from 10 to 30 years, he says. CRM lasted about 20 years in the cycle before becoming a norm in business. It first appeared in the 1980s, though he cites American Airlines’ frequent flyer programme in the 1990s as a first real application of the idea. “CRM then left the cycle around 2005,” he says.

Some things never emerge from the Trough of Disillusionment, which can be “a trough of complete denial”, he says. Sometimes the name of the technology or innovation changes as it emerges from the Trough, especially if it was overhyped or got a bad initial rap. ASP (application software provider) is better known now as the far trendier and accepted SaaS (Software as a Service), for example, while Raskino notes that 3D printing is beginning to be described as “additive manufacturing”.

But the Trough can also be a place of transformation – businesses which take their eye off innovations in the Trough and abandon investments can find themselves behind their competitors if the technology emerges successfully. He points to food retailers which invested in web commerce and loyalty card schemes (a good move) compared to those who did not.

Industry consolidation
The Trough is also where industry consolidation begins to happen around given innovations and technologies.

If an innovation is named in a way that clarifies its impact on a business, it seems to gain more hold, Raskino says. He contrasts CRM or SaaS with current Hype Cycle innovations such as “cloud computing”, “big data” or “mobile”.

“There’s no competency, no management technique, no ‘there’, there,” he says. “Cloud – cloud what? ‘Cloud computing’ – it’s still: ‘what?’ I think they may have suffered because they’re not being properly crystallised, and so they’re stalling through the Hype Cycle.”

The same happened with WAP – wireless application protocol – a few years back, he says.

He places both cloud computing and big data at the top of the Peak of Inflated Expectations right now. “Mobile” as a general term is beginning to climb the Slope of Enlightenment, while “Social” is entering the Trough. The Internet of Things is about midway up the climb to the Peak of Inflated Expectations.

Which is doomed to languish in the Trough, or set to attain triumphantly the Plateau of Productivity? Check back in a decade or two as they complete their Hype Cycles.