Ask HN: What are the signs a piece of technology will become commoditized?

There's some discussion of companies that hold monopolies in free markets here: http://www.fool.com/investing/general/2012/04/18/for-monopol.... Basically, small companies with strong brands in slow-growing, niche industries. There's nothing really assuring their monopoly except that it's not worth trying to compete with them.

Regarding tech, the best example I can think of is TI and graphing calculators. They don't have a monopoly but they have a strong grasp on a niche industry - it's far from commoditized. I'm sure a company could create a clone, but I don't know if it would be worth the effort for such a small amount of revenue.

I know it isnt a "technology" in the traditional sense of the word, but i had a front-row view of Interest Rate Curves over the past 15 years. They went from arcane numbers some PhDs calculated at the back of the trading floor, to things Business Analysts started calculating, to things you could calculate with a standard website to things that were completely transparent and commoditized.

In 2007 when I started building an interest rate curve system for a large asset manager, it cost us about $1.5m to get it up and running and another $200k/yr to maintain/operate. A lot of it was about getting clean data, but there was a lot of model tweaking/testing/maintenance as well.

In 2014 when I left the same Asset Manager, we were able to re-do the same project from scratch with a $100k vendor product. Many quants got rich carefully guarding the creation of "The Curve" and were upset when it became easy to calculate w/o expensive workers. What lead to the commoditization? Several things: 1 - Academic review - lots of papers came out about how to do this. it wasnt patented, it was just a trade secret, but no longer... 2 - Open source, especially QuantLib, which implemented what the papers described 3 - Reference implementations - people outside the industry trying to break in released many reference implementations 4 - Overseas workers - people outside Wall St wanting to break in started doing it for free in hopes of proving their skills 5 - Democratic forums - people on the outside shared knowledge freely, helping unravel the internal trade secrets.

You should reverse the question and look for barriers to entry.

In its early stages, every technology is vertically integrated, aka tightly coupled.

If you were to buy a minicomputer or mainframe in the 1970s, or a personal computer in the early-1980s, the same provider would make the hardware, peripherals, OS, applications, etc.

As the technology develops, that changes -- the PC market in the 1990s turned the hardware, peripherals into commodities. Until Apple's resurgence, it looked like the whole market outside of the OS would be commoditized.

With smartphoness in the late-2000s, it was a very similar story: tightly-integrated early phones, gradually maturing into more commoditized hardware, peripherals, and applications, while retaining a premium market segment (iOS) with tight vertical integration.

This pattern is fairly similar across industries, some good reading on the topic:

https://hbr.org/2009/12/vertical-integration-can-work/

Clayton Christiansen, "The Innovator's Solution", Chapter 6: "How to Avoid Commoditization"

Simon Wardley and "Wardley maps"; a good intro is here: http://www.slideshare.net/swardley/general-2013

was The Innovator's Solution a good book ?