I started my IT career back in the mid-90's at an accountancy practice, who used Wordperfect and Lotus 1-2-3.
The calculation to move to Excel (and office) was really easy. MS gave away Office Pro with the new Windows 95 Gateway PCs that we were buying to upgrade from DOS based ones. For a cost conscious company like they were, this was a compelling offer, when compared to paying for upgrades for wordperfect and 1-2-3
It was bumpy at first going from a keyboard driven world that people were used to, to a mouse based Windows 95 one, but people adapted...
This is from 23 years ago, so a (2000) tag would be appropriate, methinks?
Other than that, it seems pretty clear that locking in customers is the most profitable thing to do. And until the world at large starts valuing ethics over income, it's hard to argue with that logic.
This has nothing to do with ethics. The post is not suggesting we avoid lock-in out of kindness, only because it may remove a barrier to entry and therefore lead to more sales. To put it another way: the risk of losing customers because you make it easy for them to leave may be smaller than the risk of not getting those customers at all because they perceive and fear the lock-in up front.
Having said that, I suspect the world has moved on since then. Two decades of whizz-bang freemium SaaS products have created a culture where people just want to sign up and start doing stuff and so - certainly when it comes to shadow IT type products - fear of lock-in just isn't a thing. Also there are many more connections and integrations between apps. People find ways to move their Confluence into Notion, or just chuck it away and start again. All those Canva designs, Miro moodboards, whatever flash-tool-of-the-week sprint retrospectives that people are creating, probably have between zero and little value six months down the line, or where really necessary can be downloaded or screengrabbed in some read-only kind of way, so outside of Enterprise Sales I suspect nobody really cares.
But you can't do that when you're the market underdog; e.g. when Lotus 1-2-3 has most of the market share, you can't take that away with a vendor-locking product.
It's what you do when you're dominant; to protect against the up-and-comers from taking away the users.
So, one thing we can learn from this article is that the reasoning can be applied by the dominant player to understand what barriers keep users from switching, and protect those barriers.
E.g. the dominant spreadsheet player understands that when the up-and-comer spreadsheet can write the dominant document format, users will have a reason to switch since they can go back. So, vendor-lock countermeasures: distinguish documents written by up-and-comer and break their loading.
It's weird to see a David-and-Goliath story with Microsoft cast in the role of David. That doesn't really ring true, even if we're speaking about the 90s.
What he forgot to mention: If you're up against a competitor who has a switching-cost-induced monopoly, it also kind of helps to acquire monopolies in adjacent spaces. You can then use anti-competitive practices to establish more monopolies and fight those remaining few that aren't already yours.
> His points are valid, but they'd make more impact if the underdog was not Microsoft.
Words fail me here. This is one story, and one strategy, of how Microsoft became a monopolist. Everything described here works and it works because Microsoft was the 800-pound gorilla, not in spite of that! Monopolies aren't born fully formed.
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[ 4.4 ms ] story [ 33.3 ms ] threadThe calculation to move to Excel (and office) was really easy. MS gave away Office Pro with the new Windows 95 Gateway PCs that we were buying to upgrade from DOS based ones. For a cost conscious company like they were, this was a compelling offer, when compared to paying for upgrades for wordperfect and 1-2-3
It was bumpy at first going from a keyboard driven world that people were used to, to a mouse based Windows 95 one, but people adapted...
Other than that, it seems pretty clear that locking in customers is the most profitable thing to do. And until the world at large starts valuing ethics over income, it's hard to argue with that logic.
Having said that, I suspect the world has moved on since then. Two decades of whizz-bang freemium SaaS products have created a culture where people just want to sign up and start doing stuff and so - certainly when it comes to shadow IT type products - fear of lock-in just isn't a thing. Also there are many more connections and integrations between apps. People find ways to move their Confluence into Notion, or just chuck it away and start again. All those Canva designs, Miro moodboards, whatever flash-tool-of-the-week sprint retrospectives that people are creating, probably have between zero and little value six months down the line, or where really necessary can be downloaded or screengrabbed in some read-only kind of way, so outside of Enterprise Sales I suspect nobody really cares.
It's what you do when you're dominant; to protect against the up-and-comers from taking away the users.
So, one thing we can learn from this article is that the reasoning can be applied by the dominant player to understand what barriers keep users from switching, and protect those barriers.
E.g. the dominant spreadsheet player understands that when the up-and-comer spreadsheet can write the dominant document format, users will have a reason to switch since they can go back. So, vendor-lock countermeasures: distinguish documents written by up-and-comer and break their loading.
What he forgot to mention: If you're up against a competitor who has a switching-cost-induced monopoly, it also kind of helps to acquire monopolies in adjacent spaces. You can then use anti-competitive practices to establish more monopolies and fight those remaining few that aren't already yours.
"This calculus means that eliminating barriers to switching is the most important thing you have to do if you want to take over an existing market"
Still holds up today for software products, switching between products is still a pain and making that easy makes it possible to justify switching.
Tell us a story where a scrappy newcomer convinced customers to switch away from a monopolist's product. THEN you have something.
If you're objecting to the word "monopolist": MS was indeed defined legally as a monopoly, IIRC.
Words fail me here. This is one story, and one strategy, of how Microsoft became a monopolist. Everything described here works and it works because Microsoft was the 800-pound gorilla, not in spite of that! Monopolies aren't born fully formed.
MS was already a monopolist in 1990. It just took awhile for the government to notice.