When customers aren’t particularly important

In response to last week’s Keep the Joint Running, “Microsoft, operating systems, and organizational architectures,” which suggested it might be time for Microsoft to abandon its long-successful strategy of driving product sales through architectural lock-in, I received this comment: “This is interesting. Frankly, it is a simple idea that the customer is the most important element in the business cycle.” Since I only rarely resist the temptation to quibble: I mostly agree. The customer is the most important element … for most businesses. Not all, though, and part of what makes information technology such an interesting industry from a strategic perspective are the exceptions. In IBM’s case in the 1970s, and in Microsoft’s case from the late 1980s until now, the customer hasn’t been the most important element. At least, not individual customers. It’s the nature of IT that for some software categories, critical mass results in a positive feedback look that results in architectural lock-in. That was the case with MS Office: Once it had reached a majority of the marketplace, the MS Office file formats became the de facto standard, which drove just about everyone else to convert to MS Office whether they wanted to or not. The ability to easily exchange files with vendors and customers became the sole deciding factor in choosing an office suite. Microsoft’s strategy then turned away from making customers happy, and instead focused on perpetuating and leveraging its architectural lock-in. Gates and company got a pretty good ride out of that strategy, too. – Bob