BOSTON (06/05/2000) - I wonder if we, as enterprise software buyers, aren't unwittingly responsible for the stifling of innovation for which Microsoft Corp. stands accused. We may think we're saving money, simplifying vendor relations and promoting integration, but we may be stifling innovation in the PC software market.
Two things make it difficult to compete in the PC software market today: software bundling, and operating-system vendors that give their application developers the documentation on application programming interfaces (API) before they give them to competitors' developers.
We buy software in bundles such as suites because it's cheaper than buying products individually, it reduces the number of vendors we have to deal with, and we may feel that we get better integration. But I take exception with the assumption that you have to buy all your software from the same vendor to get products that work well together. Look under the hood of a car and you'll probably find an assortment of components from different manufacturers working in harmony. Software products from different manufacturers can do the same.
But by buying our software in bundles, we create two problems for innovators.
First, we thwart the basic free-enterprise principle of "survival of the fittest." Second, we make it almost impossible for vendors that don't have a full suite of products to compete with those that do.
There are several reasons that the "fittest" software product may not prevail in a free-enterprise system: poor management, poor marketing and poor advertising are a few. But when we select a bundle of products to save money, rather than evaluate individual products and select the best in each category, we may also keep the "fittest" products from prevailing. We send a message to the vendor that we're more concerned about a product's price than its quality or functionality. We also circumvent a process intended to weed out inferior products.
When we buy in bundles, we also impose a burden on vendors that don't offer a full suite of products. We force these vendors to choose: Should they use their limited resources to develop or acquire products that would make a competitive bundle? Should they try to compete on the merits of their individual products?
Or should they not even try to bring an innovative product to market because they know they can't compete?
We can also stifle innovation if we buy products from an operating system vendor that gives its API documentation to its application developers before competitors' developers, instead of waiting for these competitors to exploit the new APIs. Better yet, we could pressure the operating system vendor to provide API documentation to competitors simultaneously. This would give them a fair chance to compete and innovate.
Since start-ups can't compete fairly in the PC software market, they and their investors have migrated to other markets. (For example, Inprise/Borland, whose Quattro Pro and Paradox competed with Excel and Access, now concentrates on Internet infrastructure software on Linux, Solaris and Windows 2000.) How can we make sure we don't make the same mistakes and stifle innovation in those markets? And is there anything we can do to revive innovation in the PC software market?
I have four suggestions:
- Begin by getting management's commitment to buy the most cost-effective products in each category.
- Form pilot groups to test and measure which products in each category are most productive and cost-effective.
- Let software vendors know how you plan to choose products.
- Let platform vendors know you won't buy from them if they don't provide timely API documentation to competitors.
All this should encourage survival of the fittest and innovation.
Dan Drake, a self-appointed innovation advocate, lives in the Salt Lake City area.
Contact him at email@example.com.