The analysis the business already did in their heads

I have spent a lot of time lately inside compliance automation and infrastructure work, where the pressure is less about flashy features and more about supplier power, substitution risk, and industry rivalry. Reading Eben Hewitt’s Technology Strategy Patterns, the chapter on industry context landed harder than I expected, because it frames something I keep missing.

Every businessperson knows Porter’s Five Forces. But most of them hold it in their heads like a mental model they update as they skim headlines, never written down. Hewitt makes the point that this is exactly the job the technologist is missing out on. The folks who do this analysis informally have not seen the business through the lens of technology. That is the gap we get to fill.

The five forces, briefly

SWOT is the quick one and I will not belabor it. Strengths and weaknesses are internal, opportunities and threats are external, and you can get your own house in order before you fixate on the weather.

Porter’s Five Forces is where the interesting thinking lives:

  • Threat of new entrants. High entry barriers and low exit barriers make a market attractive. Software has high margins, so it attracts startups. But watch the medallion effect: the NYC taxi companies thought their expensive medallions were a moat, and the gig economy upended them overnight.
  • Ease of substitution. A substitute solves the same economic need with different technology. Apple was never in the landline business, but it made a better phone people switched to. Ask what your customers could stop using you for.
  • Bargaining power of customers. How much can they influence your business? The more undifferentiated you are, the more power they have.
  • Bargaining power of suppliers. In software there are really two suppliers: storage and compute, and developers. That second one is the one I can never stop thinking about.
  • Industry rivalry. How the market perceives you against competitors, sustained by real innovation rather than marketing.

The talent life cycle is a supplier power story

Hewitt walks through how a technology talent pool matures, and it reads like a curve every engineer lives inside:

In an emerging technology, there are a handful of pioneers and incredible differentiation. Word spreads, clever people learn it, and there is still a wide gap between “I have done it” and “I just heard of it.” Then the hype settles, the silly startups fail, and the tech finds its real utility. Eventually it becomes a commodity where substitution is easy, and the price of that talent drops. Java is the example. Then the tech gets automated away entirely, like the people whose whole job was typing HTML.

This is the frame for every “should I chase the new hot thing” decision. The question is not whether the tech is good, it is where you sit on that differentiation curve and whether your skills are cheap to substitute.

Why the technologist should own this

Hewitt gives four steps for putting the Five Forces to work, and they are useful:

  1. Make a slide for each force and name how the company is positioned.
  2. Make a claim about how your proposed technology supports or defends against each force.
  3. Tag each threat with a traffic light: red, yellow, green.
  4. Write succinct recommendations on how to position against each.

The reason this matters for us is that business leaders carry this analysis in their heads. When you walk in with it written down, through the lens of your software portfolio and your platform decisions, you are not just a spectator waiting for the rain to start. You are the one who can say why the platform investment defends against substitution, or why the compliance automation raises the barrier to entry for competitors.

Remember

The Five Forces is not a business-school exercise to leave to the MBAs. It is a technology strategy tool. Getting your own house in order is usually easier and more valuable than always watching the competition and hoping it does not rain. Do the analysis, write it down, and bring it to the room with the traffic lights colored in.