Where is NI headed? Some official and unofficial answers

Native Instruments has responded to our request for more clarity on recent layoffs and how this impacts their future plans. Other sources tell us there have been deep cuts into teams managing products, marketing, and design.

As I wrote late last night, NI has publicly stated they’ve cut 20% of their workforce. I should clarify that that number represents the layoffs executed just on Thursday of last week. Multiple sources have confirmed additional layoffs over the summer push the number closer to at least 150 rather than 100. This includes leaked cuts to the TRAKTOR team in July, and additional product owners, marketing leads, and designers across the company, including the previous Director of Design. Correction: NI clarifies that reductions were as they describe it to part of the Traktor hardware team. I’ve gotten conflicting reports about how deep the Traktor personnel cuts were or what the future of this platform may be.

This isn’t entirely a shock, though the scale and concentrated timing may be. It does seem cuts at NI were a long time coming. Native Instruments has a massive and complicated array of products, many of them now legacy products, and an over-complicated structure around them – both from a marketing and organizational standpoint. I think it’d be tough to find anyone to disagree with that, even in a week when people’s emotions are riled up by watching major layoffs.

And this isn’t just about the business – there’s a direct line to your experience using the products. If NI has too many products and a complicated organization that makes it hard for people to work together, that impacts users. It means it’s tough to execute new ideas and make the tools you use better.

It also stands to reason that even in any significant reorganization means staffing changes and cuts. The questions customers and partners might ask then is – why these cuts, why so deep, why now, and what’s the plan going forward?

The picture I’ve gotten from Native Instruments officially is convoluted. NI says they’re working on an integrated platform, but the cuts have hit UI, UX, design, and engineering, and late in the apparent timeline for whatever project that would be. We’re also now in year three of NI’s push to get us to think about services, but we’re not much closer to understanding what that’s supposed to mean than when we started. Here are some landmarks in that timeline:

March 2017: NI acquires Metapop, founded by former Beatport CEO Matthew Adell. Adell becomes Chief Digital Officer.

October 2017: EUR50 million in investment from a private equity firm focusing on digital services growth.

January 2018: NI reveals Sounds.com.

August 2018: Adell is out as Chief Digital Officer. (I believe this role also is eliminated at the same time.)

July-August 2019: Roughly 150 people, or 30% of the workforce, laid off. 20% are cut on August 29 in a single day.

The Thursday round of layoffs are part of a string of changes through 2019, many as high as Director level – including, to be fair, some hiring as well as firing. The main question I had is, beyond CEO / co-founder Daniel Haver and Chief Innovation Officer / President Mate Galic, who is running the new product effort, now that existing product owner of Komplete is gone and the Chief Digital Officer is almost a distant memory.

That person appears to be Nicholas Goubert, who has this year gone from VP Digital Services to VP of Products to – as of this month – Chief Product Officer. Streamlining the organization under a single product leader instead of separating digital/services from the organization at least makes sense. It means NI is realigning themselves as a services-driven company.

The obvious parallel would be to a company like Adobe, although while Adobe offers extensive services, it has kept a bunch of complex product teams and silos. In fact, that parallel itself may be apt – Adobe’s complexity reflects the fragmented and specific needs of designers. Musicians are even more particular, which speaks to the difficulty of this process. (And… I’m not sure all of you are entirely in love with Adobe, either.)

The business of being NI is selling stuff to us music makers, though, so – what service? Do we want it?

NI’s responses don’t give me a much more solid grasp of what they have in mind or how they intend to execute it. (And as you see in the timeline above, they’re effectively announcing the business structure in September 2019 that delivers the services they first talked about at the start of 2017.)

But Native Instruments claims that they’re not exiting hardware or the DJ market, contrary to rumors, and that the future services are intended to connect to products you use now. Note that saying “we’re committed to Komplete” doesn’t also mean something like Reaktor. Those silos actually appear to remain. I’d be cautiously optimistic about something like Reaktor, which powers tons of sounds and products. (The Reaktor team has also told us they didn’t see cuts in this round.)

I can also confirm that some teams are unaffected – like NKS. That makes some sense, in that NKS in some basic way does what the “One Native” vision vaguely hints at, integrating sounds, control, software, and hardware across an ecosystem of partners:

https://www.native-instruments.com/en/specials/komplete/this-is-nks/

Here are official answers from NI to CDM:

CDM: If Native is building a new platform, why were resources cut?

NI: Our new organization aims to break down functional and brand silos that have developed over time through the continuous expansion of our portfolio. Given our broad spectrum of products and the overlap between roles, it means that certain areas of product development are affected more than others by the redundancies. In the past, we have simply been doing too much at the same time and this strategic change as well as internal remapping of talent will allow us to move forward in a more effective and collaborative way.

With the focus on a platform strategy, do users need to be concerned about support for and investment in existing products?

We are fully committed to our existing brands Komplete, Maschine and Traktor. The reason why we are focusing on a platform strategy is actually to improve the experience for all users of our products. We strongly believe that by improving accessibility and usability of our portfolio, we will be able to provide an enhanced and more cohesive experience, both for existing and new customers. Rather than releasing more and more products, we want to ensure that users are getting the most out of our current products through a connected and unified experience.

Will Native Instruments continue to release integrated hardware?

Creating deeply integrated experiences between hardware and software remains at the core of our vision. However, we want to deliver more value to users of our hardware by implementing new features in the software that will allow for a better overall experience of our ecosystem.

What about the future of Traktor?

We continue to be fully committed to our DJ platform Traktor and its passionate users. Also within the DJ domain, we are focusing on improving the software experience, building on the creative and modular legacy of Traktor for both desktop and mobile. Supporting this, we are also continuing to evaluate the right accompanying hardware products. In fact, Traktor users can expect a new hardware controller this year.

I wish the new teams at NI the best. Before the layoffs, I’d heard from the current Metapop team, wanting to show what they’re working on. And with SoundCloud failing to deliver innovation for creators, and Alihoopa dead (the Propellerhead-created online music making service, later spun off), there’s a vast space for someone to show a way of using social features for music making.

However, I can only echo the overwhelming buzz I’m hearing from the larger community. Large layoffs are unsettling, not only because of the people lost, but because of the presumed disruption to the organization. Some talent in music tech is very specific – and the departure of these 150+ NI employees over recent months has competitors eager to hire. (Behringer went as far as posting their headhunting call publicly; other companies – inside and outside this industry – are being a bit more discreet.)

For now, what Native Instruments are announcing is mainly layoffs, not products. Their main job now, to regain trust after a shaky end to this summer, would be to turn that begin to say how this relates to the people who rely on them.

I know a lot of you are deeply invested in this company – some even in your businesses as partners as well as in your music making careers or passions. I’ll do my best to keep you informed.

Update: One specific bit of news. The Reaktor team is unaffected, for anyone who was worried about that. (It’d be alarming if this were otherwise; Reaktor and Reaktor Blocks now lie at the heart of a lot of NI’s newest sound content.)

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