Wednesday, June 22, 2005

Giving Credit Where Credit Is Due

or - That was then, but this is now...

It constantly amazes me, seeing the number of conversations, forums, talkbacks, emails, etc. flurrying about the Internet that are focused on finding the way to "win" against Microsoft and Intuit - both companies, in certain circles, being referred to as "big brother". Well, the 800lb gorillas, anyway.

There are the Linux community members, very appropriately using TCO (total cost of ownership) and security messages to get the attention of the market... you've got the Mac devotees who believe that computers can and should have good fashion sense... and then there are the Windows users who use it, but complain nonetheless.

With Intuit, you have a clear market-share leader in smb accounting. As for the other market segments - it's anybody's guess who wins there. It's arguable.

But what do these two companies have in common? In a word - success.

Let's face it. Without them, there wouldn't be a world of computer users representing a potential customer base for new products. Walk with me - let's talk.

Computers were once quite expensive, unintuitive, and basically unavailable for most businesses. Then PCs emerged, Microsoft hit the market - and Windows opened across the world. First, businesses broadly became computer users. Then consumers became computer users. Then everyone became a computer user. And let's remember - accounting and finance was the first primary application of general computing technology (the BETTER adding machine).

Changes in the accounting industry were also occurring at this point. Professional accounting practices began to move away from business bookkeeping, being a low-margin and labor intensive task. Intuit hit the market with QuickBooks, marketing based on the concept that "if you can write a check, you can do your own books". While this was in direct opposition to the professional accountants' belief that businesses need professional assistance with their accounting, it solved the dilemma of doing the books directly. So, many accounting practices at this point actually became focused on selling and supporting accounting software - looking at the technology as both a means to avoid direct bookkeeping as well as introducing additional revenue-earning services for the practice.

Both Microsoft and Intuit recognized a need in the market, and filled that need quite nicely. They earned their market share largely based on useability and the concept of empowerment. This is what it took to build the size of market we see today. And let's face it. They did it very well.

Today's computer user is more savvy - more aware of the options and choices. But choice often seems like complexity. With Microsoft and Intuit being viewed by many as the defacto standards for small businesses, the choice seemed like it was already made and therefore the complexity of making the right purchasing decision was removed. This is not as true today as it once was.

There are other options available. Will they gain the same levels of adoption that their predecessors did? Doubt it. The concept of "one size fits all" isn't true any more. People want tools that are specific to their requirements. Businesses want their computing platform and applications to do more for them than simply maintain status quo.

But we must always remember how we got here. Kudos to the big guys who built the market for the rest of us. We should revere these companies, and acknowledge the great thing they did - they created potential customers for all of us. Lots of 'em.


Anonymous said...

I don't know much about Intuit since I do not use their products, but I am confident that the world would be better off without Micro$oft. They have caused me more grief in my professional career than any other entity. If I had a choice at my work, I would definitely not use M$ products.

Anonymous said...

"Then PCs emerged, Microsoft hit the market - and Windows opened across the world."
Hah, selective memory, you do seem to forget a _long_ period when Windows was a totally useless product.
Remember? When people used DOS. Actually, i was still administrating 16-bit financial apps in 2002. How long have you been in the biz?

Leon Brooks said...

You've got to be kidding. Windows-as-Windows was pretty much totally ignored by the market until they literally copied the Mac interface (and got sued for it) right down to the fixed-sized scrollbar elevators (since dumped again).

Microsoft and innovation go together like Macdonalds and gourmet or Lada and performance.

After a faux pas like that one, don't be surprised if we laugh at the rest of your history, too.

Anonymous said...

You say Microsoft earned their market share by empowering customers with usable software solutions. Hmm... Microsoft was convicted of illegal monopolistic practices for strongarming OEM's into loading only its software on their computers.

They are facing strong sanctions now in Europe for similar tactics.

Reducing customers' choices to one does not empower them; it makes them dependent on a solution in a market that need not cater to the needs of customers, because there is no competition to demand it.

majones said...

The timeline was seriously compressed, I'll give you that. But it pretty much happened that way. I've been in the business of this stuff since the very very early '80s. If we continued with the CLI, it wasn't happening in volume.

I actally preferred, for businesses at that time, Novell Netware, WordPerfect and their WP Office stuff... but the customer began to demand MS - LanMan, Word, the whole deal. Even running on OS/2 so they could get the graphical desktop. It was nasty, but it was what they wanted.

I won't even debate the accounting software side of this - I lived that dream and it's undeniable.

Don't get me wrong - I didn't say I agreed with the tactics, the quality of the products, etc.... It's simply the truth that their marketing concepts (like empowerment) did cause people to BUY. That's the whole point.

Not that I like it, but really - would we be here doing what we're doing today without the market being where it is? My crystal ball is broken, so I can only see what is, as opposed to what might have been.

clausi said...

It wasn't Microsoft that made everybody using PC's - it was the competition among hardware producers that made prices decrease so much that everybody can afford a PC, today.

This was possible because Compaq reverse engineered IBM's BIOS: otherwise Microsoft wouldn't have been able to establish its monopoly on operating systems, office software, and internet browsers.

Microsoft was bound to be successful with hardware producers driving the market. You shouldn't compare this to the success of a company with competition.

dwainhuron7331 said...
This comment has been removed by a blog administrator.
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