Changes in the Marketplace


There are a couple of golden rules in software. First, take care of your customers. They go away very quickly if you don't. Customers are quite fickle if they're not taken care of. Second, keep your products up to date, otherwise there's always that competitor right behind you. There's always a competitor in every sector. Don't think you're the only one. That's a big mistake.

If you are a brand new software company, you had better figure out how you're going to distribute your product. You may have the world's greatest mousetrap, but, today, you'd better figure out how you're going to sell it. The doors are not so open to everyone that you can go in and say, "Here's my great mousetrap. The world will come to me." That's not the way it works. Most new software companies start out with stars in their eyes: "I've got the greatest product. You can't live without it." That's just a small part of the question. The real question is: How are you going to distribute the product? That's where the attention should be put.

Every software company is always reading the tea leaves. You're reading the analysts' reports, you're talking to your customers, you're going to trade shows. You just have to be out in the market. If you're out in the market, you get the drift of what's going on. That's how software works - just like any other business. If you can anticipate changes in advance, then you can have a product available that rides the wave.

Our strategy for the future is based on a number of things. We're not going very far out in the future. If someone asked me in 1994 to give them a five-year plan, I would have been 1,000 percent wrong because no one would have predicted the Internet. Everything changed when the Internet came in, so everyone's plans were wrong. You can't plan too far ahead in technology because there are too many uncertainties. But you do plan ahead some length in time because you do see trends of where things are going. We're always reading the teas leaves, figuring out where things are going, and we're trying to position ourselves to be there. But it's not more than a year ahead. Two years ahead, yes, we're thinking about it. Five years ahead - no.

I remember when we first started in 1975, I was talking to an executive who asked how it was going. I said, "We sold our first system last month." He said, "There's a huge difference between zero and one. You have no idea how far ahead you've moved because of that difference." I always think about that. It's so true. In some sense, that's my advice. When you can sell something that's ready to be sold, it's a huge step forward.

A lot of people will show you prototypes, but they just talk a good story when they never have anything to sell. Their demos are always nice, but they never get the product to the point where people really can sell. That's why there is such a huge difference between things that are saleable and things that are demoed. There are a lot of demos in software that we called slideware: "I'll show you my presentation in PowerPoint." I want to see a working product that is saleable. That's a big difference.

Right now times are much harder; people are not spending their money so easily. My advice is probably directed to what you have to do to get people to open their pocketbooks more. In the software business you have to know what you're selling; you've got to know your product inside and out to represent it and sell it. That's a piece of advice I always give, even to the salespeople. You really have to know what you're selling. The days of just being a spiel artist are over.

When I started this business in 1975, there were no stores that sold packaged software. In fact, when we would go to sell a product in 1975, potential buyers would say, "Why would I want to buy software? I have programmers." It was later, particularly when PCs came in, that you could buy software at a store. The industry had already matured by that point and they knew that to get software, you go to the store and buy it, not programming it yourself. The newest thing is buying software over the Internet. That's just another way to buy software and I think that has enlarged the market. The total marketplace has gotten bigger, but the fundamental difference in buying software occurred much earlier. It is just that the method of distribution has changed by being able to get it on the Internet. You can download it yourself in many cases. It's a little easier to use; there's a lot of emphasis on making it easier so people don't need as much help.

There is no doubt that software is going to invade many products in which you can just see the tip of the invasion. Cameras, for example, are going to get a lot smarter now that you can put so much information on a chip. I think we're going to start to see very much smarter gadgets. Everything is going to be smarter. They're already starting to put chips on all the items in a store instead of tags. The tags will have chips and the way you do inventory is you turn on a machine and tell it to read all the tags in the store. Then, boom, you have your inventory. I think the area of computers invading our everyday life is just starting. We think of computers as being that big box under our desk. When I was a kid, my parents and great-grandparents had radios the size of the refrigerator. In ten years, people are going to look at computers from today and say, "Look at that big computer!" We're going to think of them as really strange things because computerization is going to be in everything you touch. Computers will be down to the size of a tiny card or CD. You can put gigabytes of storage on your fingernail, practically. Yes, you need a place to put cards and such, but by and large, as these things get standardized, computers will not only be little things that you have on your desk; they will be in everything that you do. It's starting already. Slowly, we are beginning to see the computerization of everything. We've got all the factors: miniaturization, huge storage capabilities, very cheap chip production, a communication course of practically down to zip. We're going to see all kinds of computer invasion in our lives.




The CTO Handbook. The Indispensable Technology Leadership Resource for Chief Technology Officers
The CTO Handbook/Job Manual: A Wealth of Reference Material and Thought Leadership on What Every Manager Needs to Know to Lead Their Technology Team
ISBN: 1587623676
EAN: 2147483647
Year: 2003
Pages: 213

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