As we discussed in last month's column, the infrastructure supporting the customers' Technology Adoption Process includes several components that all play a crucial role in its success. Perhaps the most often overlooked component is the External Delivery Infrastructure. Consultants, developers, instructors, trainers and associations comprise the external relationships that assist a company with technology selection, implementation and use. But, whose responsibility is it to build this infrastructure IT's, the vendor's, the user's?
IT has its hands full keeping up with new technology (Web, e- business, supply chain optimization, customer relationship management, etc.) and users' requirements. Charlene Hamiwka, North America AS/400 Business Intelligence Executive at IBM, acknowledges the challenge of keeping up with the technology. Hamiwka relayed a supporting quote as follows, "Eighty percent of technology products and services available today were not sold five years ago. And, in five years the same will hold true." IT is concerned with putting things together and keeping them running. Although IT could build the External Delivery Infrastructure, IT hardly has the time.
Users have the need and the purchasing power. But, their focus is on the business and trying to get their issues solved. Getting computerized is not their job; therefore, it won't get done.
Vendors have the most to gain by building the External Delivery Infrastructure and the most to lose if they don't. The company offering the better technology doesn't always win. It is the vendor with the best External Delivery Infrastructure who dominates. John Scully, partner with Scully Brothers LLC, recently said, "The value of a customer begins when you deliver the product or service. The metric that matters the most is owning the relationship." Vendors don't really own the relationship until their products are actually used.
Microsoft and IBM have excelled by building extensive External Delivery Infrastructures. Says Hamiwka, "When you have thousands of companies marketing your product, you're pretty safe."
In 1988, Microsoft's revenues were comparable to Lotus Development Corporation, and their application revenue was insignificant. Now, 10 years later, after building its External Delivery Infrastructure to more than 18,000 Microsoft- certified solution providers, Microsoft is an indomitable marketing force.
Microsoft and IBM's sophisticated External Delivery Infrastructure comprises a broad spectrum of partners that influence end-user adoption of their products by providing industry solutions, expertise and services. Such partners all provide expanded geographic and market presence for IBM and Microsoft. Their partners include:
- Influencers who affect the market's perception and receptiveness to a given technology, company and product and influence the customer's purchase decisions;
- Third-party developers who provide industry-specific solutions;
- Consultants with industry-specific knowledge and expertise;
- Instructors who lead courses to help users understand the value of a solution and motivate them to use it;
- Trainers who teach the users how to use the solution;
- Resellers, system integrators and VARS who provide some or all of the previously mentioned services.
Superior technology, ease of use and the ability to improve user productivity are not enough to assure success. In April, 1996, Evans Research found the Macintosh OS to be 110 percent easier to use than Windows 95 and that it increased overall productivity 40 percent more than Windows 95. Given these statistics, why is Windows the dominant operating system? To a great extent, because 18,000 Microsoft-certified solution providers are recommending it.
|Microsoft Corporation||Apple Computer, Inc.|
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|*Knowledge based on consulting to Microsoft for nine years and Apple for five years.|
|Figure 1: Reasons for Microsoft Domination|
Microsoft has consistently focused on targeting select industries and building the necessary External Delivery Infrastructure to reach new customers. Groups within Apple repeatedly attempted to do this; but those groups were dissolved, their budgets eliminated and their job responsibilities changed. This lack of continuity damaged Apple's reputation among customers, third-party developers and partners.
Figure 1 highlights two of the reasons Microsoft has dominated.*
Oracle/Informix: The Similarities
In 1996, when Qualitative Marketing started doing research for Informix, it was the Microsoft/Apple story unfolding all over again. Informix had leading-edge technology, but Oracle had the External Delivery Infrastructure. I predicted that if Informix did not address its entire infrastructure, Oracle would have a significant window of opportunity to catch up technically, just as Microsoft did with Apple.
Oracle used the external infrastructure in a different way to establish a competitive advantage. In early 1997, Oracle launched an aggressive and successful campaign through its infrastructure to combat Informix's Universal Server (IUS) strategy, claiming it to be impossible despite the fact that Informix had the technology. Informix had about 22 mission-critical applications already developed or under development. Oracle was able to build consensus among analysts and its partners that IUS technology was not possible and successfully eroded Informix's market share.
Oracle had the External Delivery Infrastructure and concentrated on supporting it. Informix did not. Oracle had industry-specific departments. Informix, on the other hand, struggled with it and questioned its value. Because Informix did not support its existing infrastructure partners, it was not able to benefit from their power and influence or adequately counteract Oracle's campaign.
Vendors have the most to gain in building an External Delivery Infrastructure because the partnerships support the customers' Technology Adoption Process. Users and IT can work with vendors that have the External Delivery Infrastructure to provide all of the products and services needed for a complete solution. June's column will address how vendors can build the External Delivery Infrastructure required to facilitate their customers' adoption of their technology.
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