Innovation Trick: Turn Something Old into Something New
HP (HPQ) partnered with a semiconductor manufacturer to create a new line of high-performance servers for use in supercomputing. So, who's the lucky chip vendor? Intel (INTC)? Nope. AMD? Not even close.
The answer is Nvidia (NVDA) -- yes, the graphics chip maker. Actually, the partnership is now a decade old project in which HP uses a special line of graphics-processing chips to obtain massive speed in crunching numbers. It so happens that graphics processing is basically math. And so the venture presents an interesting twist on commercial innovation: Take something old and find a new use for it.
New mental combinations
People often assume that innovation means inventing something new. However, ask a researcher like R. Keith Sawyer, professor of psychology and education at Washington University in St. Louis, what creativity is, and you might hear what he told me last year in an interview:
If you're a psychologist and trying to understand basic mental processes, it's pretty simple. It's some sort of mental combination that is new for the person that they externalize somehow. [However,] people make things that are new all the time, but they might not be important or interesting or important. It has to be new and somehow useful or appropriate or relevant to some community of people.A new mental combination is a perfect description for taking an existing product or technology and putting it to another use. That could mean anything from putting what you're already using into a new context to finding a new type of customer to modifying a current product to expand its functionality. It's how Pfizer turned a hypertension drug into Viagra. It's how Starbucks (SBUX) created a new coffee culture by changing the context in which consumers meet a product. Voila! A cuppa joe becomes a $4 latte.
Nvidia took its central technology and noticed that what it had to do -- make large numbers of calculations in fantastically short times -- was perfect for a different context. The chip technology still performed the essential function it always had. The main difference was that the system in which it worked used the results for another purpose.
Endless combinations, in fact
That's not the only innovation putting old chips to new uses. In February, SeaMicro announced what it claimed was the most energy-efficient 64-bit server that used Intel x86 architecture CPUs -- one that used a quarter of the power and space of equivalent "regular" servers.
The trick was that SeaMicro used Atom dual-core processors. Intel created the Atom for netbooks and other low-power uses, but the most recent version could perform 64-bit computing. SeaMicro used its own chips to act as controllers and centralized communications and power to reduce size, power consumption and cost. The company's systems aren't good for all applications, but they are a fit for some popular applications, like Web servers.
Sometimes companies find that their customers stumble across an entirely different way to use technology. A classic sales story is about the man who sold refrigerators to Eskimos. It sounds like an unlikely task until you realize that Inuit need a way to keep food warm, not cold. A heavily insulated box still does the trick.
Google (GOOG) recently learned that Google Translate has a musical use that no one in the company had considered. Some customers discovered that typing in strings of consonants as English and having the system translate them into German and then "speak" the results created an impromptu rhythm machine:
It just shows that a use of technology that might seem like silly garbles to one could be music to another. And if the product or technology already exists, getting to market suddenly becomes a lot faster and cheaper.
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