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This blog is on the far right of the blog curve
First off, let me say that Wired editor, Chris Anderson is an excellent writer. He writes in a strong clear language, that is easy on the brain. That said, I’m gonna paraphrase him here, and recommend that you dig deep yourself, as The Long Tail practically reads itself.
So do you remember what the 1/x curve looks like? That’s essentially what the market dynamics look like if you were to plot a curve of sales on the Y axis and products on the X axis. High volume sellers on the left, represent a small fraction of the total sellers, but a large chunk of the sales in the traditional market. What Chris Anderson sheds light on here is that with the internet adding choices beyond what most retailers can carry, it is lengthening the sales of products to the consumer.
For the retailer that means that their total sales volume is going up significantly as they add products. This is true of online retailers as well as brick and mortar retailers. What limits the retailers traditionally has been the costs associated with inventory shelf space. Online retailers have a distinct advantage when it comes to selling items, as they can reach a much larger audience than the ones in driving distance of the store, so things that wouldn’t sell often enough for a given location, can sell well enough for the aggregation of all locations. This principal is then put on steroids by the fact that more and more of the products today are sold digitally, and therefore the shelf space for a given item is the cost of the disk storage to house it.
Anderson then goes on to discuss how folksonomies, recommendations, and other structures are helping to expose customers to items further and further down the tail, so that people make connections that they wouldn’t have been making otherwise. It turns out that while there is a long tail for books overall, there is also a long tail for books about economics. And while The Long Tail may be well behind Harry Potter, it could be a relative hit within the economics genre and many people who read the long tail may also be interested in Wikinomics as it was recommended to them, or had the same tag.
So What? …How different is the concept of finding a large source of untapped revenue by moving to smaller and smaller artists, than finding a large source of untapped revenue by moving to smaller and smaller clients? Where companies such as mine find risk of dealing with smaller clients, there are others stepping in to serve those clients. The perceived notion in my niche that the big consulting company must be more expensive over the little guy, really isn’t true. Additionally, the more small projects we can bring in, the greater exposure to more business practices which improves are institutional knowledge of the market, and also could lead to shorter projects, making each of our resources more valuable. So why not go after the smaller clients? There may actually be less risk with the smaller clients, as the potential for a large financial disaster is greatly reduced.
Posted By: Paul Pettengill On: September 10, 2007 At: 6:02 am
So, if I were truly to discuss the Consulting Industry at large in context of The Long Tail, there would be a couple of sets of Long Tails. First would be the Long Tail of clients, clients that utilize great amounts of consulting services, right down to those companies who use next to zero consultants. Within the long tail of customers utilizing services would be genres. These genres could be segmented by the type of work that they purchase from consultancies, or by the industry the clients are in, or both in the case of Pharmaceutical Contracting consulting.
There is also as you recognize the long tail of consultancies themselves. There are the large generalist companies, down to the smallest of niche consultancies.
What CA shows with his Long Tail data is that not only can small authors find readers, but that its profitable for the large companies such as Amazon to offer the small authors to the readers.
Consultancies in general, are nothing more than a group of people with a specific set of skills or domain knowledge, or both. In fact if you look at the large consultancies what you see typically is a segmentation of offerings that have deep expertise in domain or deep skills with a specific technology or process. Its the ability to gather these types of people together for a specific project that makes a strong value add for the large consultancies.
Your take on the impact of forums to discuss the relative merits of each vendor and consultancy is an interesting one, albeit a bit tangential from the Long Tail itself. 
I’m not convinced that even though forums are more easily facilitated by today’s technology, that they are helping to inform clients about the reputations of the individual consultancies. There would appear to be more need for transperancy of projects and their results to these online forums. This would make the industry follow the more normative Long Tail itself, as it would give more mobility within the Long Tail for the consultancies, which should benefit the clients and be more of a meritocracy amoung the consultancies themselves.
Posted By: Michael On: September 08, 2007 At: 1:20 pm
Heyo — wish I had the time and gumption to be as learned as you. I said I wanted to leave comments, so I shall!
I’ll challenge your conclusion a bit, since that’s where the fun comes.
While I am not saying that CA’s argument cannot be applied to the consulting industry, I am not certain if your argument is founded on the ideas he proposed or on other concepts that may be equally valid but more tangential. It sounds to me that CAs argument is that there is a growth in small retailers (both the retailers themselves and the number of retailers) as new technology has bridged customers in a way that their demand can be aggregated and served to justify the existence of a supplier.
The application to the consulting industry here would more likely be tied to the rise in super-specialized firms (such as some of our business partners) as a result of the increased ability to serve distant clients with particularly niche needs. Specialized firms can arise due to the reduced cost of providing these services and the increased reach to the clients, which comes about as many of consulting’s most tangible benefits can be produced and delivered remotely — from code to strategic advice — much as online retailing. Client aggregation has been helped by technology, certainly as customers may look to the internet to find vendors taht can satisfy their niche needs. However, I think the more important impact of technology in aggregating client demands is a bit more evolutionary, stemming first from the increased interaction between customers who hold similar responsiblities in different and sometimes competing client organizations then in the ability for the niche services to leverage those forums to advertise their services. These technological forums also serve to build reliable references far more quickly than could have been in the past.