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A Stupid Response

I've been reading some comments about ISOS and have been enjoying them immensely.  I've decided I should respone to some of them and my responses are below.

Don't be shy to throw further brickbats my way if you feel the urge!  Great fun!

+++I've read half of it, and I'm fighting an urge to throw it in the trash already. The author simply writes about companies he has worked at,+++

Objectively untrue.

I worked at MicroPro, Ashton-Tate, and consulted with IBM and Novell.  I profile or mention the errors of about twenty to twenty five companies in the book, though since I've been around a bit I certainly know many people who worked at these other companies and drew on their experiences to write the book.  For instance, I spoke to Pete Peterson, one time head of WordPerfect, about the events that occurred to bring the company down.

+++and spends much time smugly informing the user of his mundane experiences+++

Also objectively untrue.

Let's take MicroPro for example, the $70M company that destroyed itself over a marketing positioning mistake.  While it's true that I worked there, there is no factual dispute about what destroyed the company.

Nor is there any factual dispute that Borland and later Novell repeated almost exactly the same mistake years later with almost exactly the same consequences.

Now, I'm not sure why that's "smug." 

+++Nor that usually have little or no connection to the topic - their only purpose seems to be to be a desparate attempt by the author to make himself seem like he has special insider knowledge (touting the gems of deep insight that ones has from being a PC salesman and as a medicocre middle-manger).+++

I'm not sure what you mean by this.  For example, the chapter dedicated to MicroPro's positioning disaster and MSs stupid "Two Nags" ad campaign is called "Positioning Puzzlers." 

The chapter dedicated to AT and Ed Esber is called "We Hate You, We Really Hate You" and boy, they really DID hate him (Ed) and some still do!

The Novell chapter is called "Godzilla to Gecko" and that certainly seems an accurate description of what has happened to Novell.

+++We get all sorts of personal opinions which aren't backed up with data,+++

Again, objectively untrue.  How much "data" does anyone need to "prove" that OS/2 was a giant fiasco?  Do people actually need me to go through marketshare figures of the mid-90s to prove this?  I certainly told you what the financial consequences of IBM's failures were: Over 200K in layoffs, a $5B loss in one year, $8B the next, Akers tossed out on his ear, permanent loss of prestige, etc., but how much more of this stuff do you need to know or want?

Likewise AT.  How much data do you need?  The company was the market leader in 1988 in its category and was sold to Borland a couple of years later.  At the time it was sold it was loosing market share and money hand over fist!

Or WordPerfect.  At the time of its pointless acquisition it was a $100M money looser.  And I told you its fire sale price when Novell finally unloaded it.

And Novell.  There is no factual dispute it shut down its key development support program at the exact time MS was deploying NT.  There is no factual dispute it lost its market-leading position to NT.  I told you about its financial losses.

+++ and worse - he offers no solutions apart from some banal, blindingly obvious statements.+++

In some cases, the solution IS blindingly obvious.  Yet, oddly enough, perhaps because of their insufferable arrogance and lack of knowledge of history, companies keep doing the SAME THINGS again and again and again. As I demonstrate with MicroPro, MS, Novell and Borland.

I thought it was very useful to point  this out.

Of course, if you want to repeat history, don't let ME stop you!

+++ Of course, it's clear from his comments that had HE been in charge, the companies involved would now dwarf Microsoft. +++

I say no such thing, nor do I imply it.  Of course, I will say that I learned, the hard way, how much damage a positioning mistake can cause a company and would not repeat THAT mistake.

By watching Ed Esber, I learned not to annoy every developer in the world who used my products.

By watching Intel I learned that if I spend mega bucks telling everyone that great I am because I am great, I'd damn well better bite the bullet if my principle product develops a significant flaw and not try to weasel out of it with geekspeak.

I'm not sure that's smug!  But it IS what happened.

+++spent some time in the first chapter positioning it as business book ++

Well, it certainly seems to ME to be a "business" book.  It is a business book about high-tech marketing (with a secondary focus on development faux pas) that analyzes what some very prominent and not so prominent companies did wrong.  And yes, I do offer some practical solutions, though in some cases the answers are stunningly obvious.  In hindsight.

After reading the book, you too will have "hindsight."

Now, it's certainly not a "finance" book, nor does it deal with sales techniques nor personnel management.

But then it never claimed to.

+++seeing as he is criticising a well regarded book that did just that and failed miserably.+++

Well, that can happen when you fake your data, like "Excellence" did.  But "Stupidity," quite deliberately, avoids the use of standard bromides and prognostications.  I wanted to accurately analyze what companies and people did and allow you to "see" the consequences.

In some cases, that SHOULD be enough.  That said, I do offer practical advice on avoiding disasters at many points in the book.

However, as Karl Marx pointed out, history repeats itself, first as tragedy, then as farce.

rick

rick chapman
Thursday, August 28, 2003

Ric,

If you publish another book, you will learn to not give two whits what anonymous techies think or say.

I've seen some people on this board that will argue that the sky is blue. The same people will snipe and complain about anyone who publishes anything for the sheer sake of complaining.

In short, techies are generally a sniveling, sniping, complaining lot and I wouldn't have even bothered responding to their criticisms.

Got another?
Thursday, August 28, 2003

Hi Rick,

sorry to budge in, but since it was in direct reference to your book I was hoping you could comment on http://discuss.fogcreek.com/joelonsoftware/default.asp?cmd=show&ixPost=62459&ixReplies=31

Just me (Sir to you)
Thursday, August 28, 2003

To others reading this thread, the initial thread is 'In Search of ... Pointless Self Promotion' below. I have posted a response to part of this repost below, although Rick has added further detail.

I'm interested in seeing other people's opinions on this.

Rick, in response to my comments on ISOE and ISOS [as long as we're using acronyms], I agree that faking the data will do that to you. But this does not invalidate my point about your decision to exclude data in your work. I am not you, but as a reader I felt that the decision to exclude data was also due to the targeting of your book. Your target audience is much more specific than that of In Search Of Excellence, and your approach seems to be less of a 'by the numbers' path than a 'through common sense' direction. Although, on this I don't think we are actually arguing. Just some subtle play with the vernacular of our respective locales.

Reading your book, I can't help but notice that hindsight is 20/20. I wonder about the abilities of any non-prescient man to divert these mistakes. In the long run, and I think you make this point elegantly, we can only hope to prevent the recreation of certain fundamental errors. However, I think this feat may be Herculean in nature owing to the uncertainty of a moving process and the number of players involved. Many of the things you point out in your book probably at the time seemed to be calculated risks, speculative ventures that did not pay dividends. While I do not argue their stupidity in hindsight, perhaps the same decisions would have been seen as foresight had the issue not fallen before non-analyzed subtleties. The difference between failure and success is a fine line. On one side is stupidity and the other, brilliance. 

Dustin Alexander
Thursday, August 28, 2003

+++If you publish another book, you will learn to not give two whits what anonymous techies think or say.+++

Hey, they're readers!  I owe them!

And I think it's useful to read and respond to their comments.  I learn what people think, what they like, what they don't like.  Sometimes the points made are valid and I need to consider them.

Sometimes they aren't and it's useful to counter them

And from a marketing standpoint, people will read this thread and be more inclined to buy the book so that they can know what we're talking about.

A win all around!

rick

rick chapman
Thursday, August 28, 2003

+++But this does not invalidate my point about your decision to exclude data in your work. +++

But I do not "exclude" data in my book.  I give accurate financial figures about the consequences of these actions and accurate analyses of what happened to lead to these results.  I back up my statements with quotes, data, footnotes, and my own experiences.

(And my data isn't faked.)

So I'm afraid your point is indeed "invalid."  Or more to the point, inaccurate.

+++Your target audience is much more specific than that of In Search Of Excellence, and your approach seems to be less of a 'by the numbers' path than a 'through common sense' direction. +++

Marketing comprises both number-driven exercises as well as activities that are not "numerical" in nature.  Few meltdowns in high-tech occur because of "bad" numbers.  The numbers simply reflect the outcome of your business decisions.  For instance, IBM's failure to clear up its trademark issues with Paramount over the use of Star Trek themes lead to the Warp naming meltdown.  This in turn led to IBM creating a truly stupid ad campaign.  This in turn led to lower sales of OS/2.

The issue here is executing a marketing basic, not bad numbers.

+++Reading your book, I can't help but notice that hindsight is 20/20. +++

Uh, that's something of a tautology!  Can't disagree with that statement.

+++I wonder about the abilities of any non-prescient man to divert these mistakes. +++

As I say in the intro to ISOS, EVERY mistake I outline was avoidable.  I deliberately threw out any story that dealt with plane crashes, the founder of the company driving his Ferrari (with his nose stuffed with a certain white substance) over a cliff the day of his company went public, etc.

+++However, I think this feat may be Herculean in nature owing to the uncertainty of a moving process and the number of players involved. +++

NAAAAHHH!  That's just an excuse.  Yeah, the unexpected will happen.  Yeah, life will throw you many curves.

But building two products with the same name, price point, functionality and feature set and trying to sell it to the same people at the same time?

I can tell you what will happen to you before you do it.  And it won't be pretty.

Don't hande your trademarks issues properly?

Ditto.

Enrage your entire development community?

Slam dunk as to the outcome.

+++Many of the things you point out in your book probably at the time seemed to be calculated risks, +++

That is true, to a point.  However, now ISOS gives you the opportunity to avoid some of these "risks" because, as I point out, they're no longer "unknown" risks.  Now they're STUPID risks.

Which doesn't prevent people from taking them all over again.

rick

rick chapman
Thursday, August 28, 2003

No problem.

1) IBM: $87,401,000,000
2) Sony: $57,787,110,000
3) HP: $45,226,000,000
4) AOL: $37,224,000,000
5) Dell: $31,888,000,000
6) Intel: $26,539,000,000
7) MSFT: $23,845,000,000
8) SUN: $18,250,000,000
9) Oracle: $10,859,672,000
10) Apple: $5,363,000,000

This seems to be a mixing of apples and oranges.

Hardware companies are always "bigger" than software because hardware takes up more "volume" in terms of the the amount of money you need to spend and sell to be profitable.

Average gross margins on Windows are about 85%  If you're doing 35% in hardware, that's hog heaven.

Also, AOL/TW may sell lots of magazines but they also managed to lose $50B in ONE quarter.  Ever see MS do that?

Ever see Adobe layoff 200K people?

SUN is losing marketshare almost hourly to Linux.  They've never made a dime on software and still haven't figured out how to.

Apple went from 30% marketshare to 3%.  I don't think they're going to be in the PC market much longer.

Joel's chart was from Soft*Letter, a software focused publication.

Also, if you bought MS stock in 1986, how rich would you be now?  Compared to every other company on the list?

rick

rick chapman
Thursday, August 28, 2003

You seem to be a business guy, not a real techie. I'll leave the rest of the Apple zealots to tell you why Apple is not going to be leaving the PC market anytime soon.

Meine Hosen sind hervorragend!
Thursday, August 28, 2003

Two Words: Niche Market.

Expensive to compete in, subject to customer zealotry, and moderately permanenet due to these factors.

But, to give Rick credit, Apple's penetration will more than likely shrink percentage wise as the PC market continues to grow.

Dustin Alexander
Thursday, August 28, 2003

+++You seem to be a business guy, not a real techie.

Hmmm.. I don't think that's the point.  The point is that Apple is in slow spiral out of the PC market and when you hit 3% market share it's difficult to see how you escape the business contraction you are undergoing.

+++Apple is not going to be leaving the PC market anytime soon. +++

You need to think like a business person.  Apple won't "leave" the market; it will be kicked out by customers not buying its computers.  Very few are these days and the trend seems to heading towards down and out.

rick

rick chapman
Thursday, August 28, 2003

+++Two Words: Niche Market.

Expensive to compete in, subject to customer zealotry, and moderately permanenet due to these factors.+++

Hmmm.

SGI.  Sun, even.

All fading.

And Apple is not even as closely focused as these companies.

rick

rick chapman
Thursday, August 28, 2003

The Windows margin might be 85%, the overal Microsoft margin is around 27%. Seems some of those hardware companies are doing pretty well.

You say I'm comparing apples to oranges. True to some extent, but what I am trying to show is a reasonably sliced market. By that I mean an approximation of a market that at least includes the major competition that a company is facing, especialy if you are trying to show that the company dominates its competition in revenue.

I'd further argue that which part of the cake a solution provider selects as a profit center, and which it positions as a loss leader (Hardware, software, support, consultancy, content, ...) is purely a strategic choice in the business plan. It does not suddenly define one's competition and shield it from those that choose differently

The numbers of the soft*letter are not in dispute, but I argue in that discussion that they are partcularly unsupportive of the conclusions drawn.

Just me (Sir to you)
Thursday, August 28, 2003

The Windows margin might be 85%, the overal Microsoft margin is around 27%.

Another apple and orange, I think.  Do you mean MS's gross profits are 27%?

Dude, that's a fabulous business performance! Why do you think MS has $50B in the bank?  Do any of THESE other companies have $50B in the bank?

+++You say I'm comparing apples to oranges. True to some extent, but what I am trying to show is a reasonably sliced market.+++

Depends on the slicing, however.  In Search of Stupidity deals with software/hardware about 70%/30%.  That's because, as I say in chapter eight, software is the glamor side of the business.

But AOL/TW is more a magazine company these days than a high-tech one.  Sony makes computers, but they sell more consumer electronics than anything else.  I don't think they should be in there, really.

You know where HP makes most of its profits?  Ink and toner for its printers.

Do they really compare to MS?

(Hardware, software, support, consultancy, content, ...) is purely a strategic choice in the business plan. It does not suddenly define one's competition and shield it from those that choose differently)

But I'm not sure Dell competes with MS or perceives it does so.  Until Xbox, Sony did not perceive itself competing with MS, and for most of the markets in which it participates MS is not a factor.

AOL/TW is a hybrid.  MSN competes with AOL, but how many magazines does MS sell?

IBM makes most of its money in consulting.  It is out of the PC consumer space and a faded glory in business hardware in many respects.  It's big but can barely grow anymore.  (3% in the 90s).  It sells a fair amount of mainframe software to a captive audience, but its Open Source and web stuff don't compare to MSs software sales figures.

I think your chart is not a good representation of the high tech market.  You need to break out hardware from software more cleanly, and do some more segmentaton.

IMHO.

rick

rick chapman
Thursday, August 28, 2003

Rick,

First, let me apologize personally (and publically) to you for my abrasiveness in my critique. As I've mentioned before, it was undluy harsh. I stand corrected.

I also want to make it clear that I have nothing but admiration for those who manage to write a book and get it published - it's a long, hard hard road. A lot of people talk about writing a book; few actually do it. I appreciate the effort that you put into this book. 

The history of the IT industry mentioned in ISOS is quite revealing at times, and the book does throw new light on some famous and not-so-famous incidents. There is plenty of value in ISOS. I think that more than anything, that main issue is that you've been let down by your editors - better editing would have helped you keep the focus on the companies themselves.

I'm a very avid reader of tech books and business books and as such, I have very high expectations from these books. Perhaps too high. Especially since time is at a premium and like every technie out there, I have a lot of books competing for my time. None of this is an excuse of course - I'm just trying to help you get a perspective of where I'm coming from.

I won't back away from my initial assessment that this book needs more "meat" - but I do uniquivocally apologize for being downright insulting. That was completely out of line and frankly I'm embarassed that I was so thoughless.

Burninator
Thursday, August 28, 2003

The problem is, I think, this book isn't really intended for techies.  I read through all the chapter excerpts, and I didn't feel it was for me.  We know the industry is fucked up, and we don't have to buy a book to entertain ourselves with examples.

What I would be interested in is if I could learn more about what it's like to be a salesman or marketer.  I don't know what that means for the book:  does it mean it should be more centered on the author?  Or should I get the illusion that you're letting me on the tricks of your trade?  Maybe I'm just not the right market for the book.  I just have a vague sense that I learned little reading those excerpts.

I don't even see people buying it for that special executive in their lives.  "It made me think of you."  But in the abstract, I definitely think it's great to have an anti-stupidity book; it can only do good for the world.

Tayssir John Gabbour
Thursday, August 28, 2003

About Apple, here's the way I brain it -- 3% high-end share of a large market is ordinarily fine except for the network effects in IT.  However, Apple erodes the network effects by supporting:  Unix, Java, MSOffice, and the web.

Also, it's a weak economy.  Apple targets the high-end.  So they will be bruised, but they're consolidating to ride the crest of the upswing.

Wintel PCs have huge cost advantages, especially counting AMD and Un*x.  So what can Apple do but accomodate the competition?  Their high-end machines have only 10-20% premium against comparable PC workstations, and some of their notebooks are really great deals.

Tayssir John Gabbour
Thursday, August 28, 2003

+++First, let me apologize personally (and publically) to you for my abrasiveness in my critique. As I've mentioned before, it was undluy harsh. I stand corrected. +++

Thank you.  That is very gracious of you.  But don't be TOO concerned.  You don't write a book like Stupidity because you're a shrinking violet.  Got to be prepared to take your lumps.

+++There is plenty of value in ISOS. I think that more than anything, that main issue is that you've been let down by your editors - better editing would have helped you keep the focus on the companies themselves. +++

In all honesty, I would not have let them take out the footnotes.  I had a lot of fun writing them and they are a part of the book's "flavor."

ISOS reflects almost exactly the vision I had of it.  The text, approach, cartoons, illustrations, appendix, everything. It was supposed to informative, accurate, and funny!

And it is supposed to highlight avoidable marketing disasters and describe the consequences of non-avoidance.  It provides high-tech with an "institutional memory," so to speak.

If you don't like it, I'm entirely to blame!

(You can't please everyone so you have to please yourself.)

rick

rick chapman
Thursday, August 28, 2003

+++The problem is, I think, this book isn't really intended for techies.  I read through all the chapter excerpts, and I didn't feel it was for me. +++

That's fine as long as you are kept well away from a position of executive leadership in EVERY company you work for.

However, if you are ever given the reigns, even partially, of power, you are going to need to know what, and what not, to do.

And even VPs of development had better have a fundamental understanding of marketing and sales basics if they want to succeed in their jobs.

+++We know the industry is fucked up,+++

Well, some companies succeeded and others failed.  Do you know why?  And how to avoid making THEIR mistakes?

Grunts in the trenches don't.

Captains of Industry do.

+++What I would be interested in is if I could learn more about what it's like to be a salesman or marketer. +++

If you want to know what you have to do, buy the 4th Edition of The Product Marketing Handbook for Software (out end of September).

+++Or should I get the illusion that you're letting me on the tricks of your trade? +++

These are the stupid tricks of the industry.  No illusions, just what happened.

rick

rick chapman
Thursday, August 28, 2003

+++About Apple, here's the way I brain it -- 3% high-end share of a large market is ordinarily fine except for the network effects in IT.  +++

I have to disagree.  3% usually means you are a dead duck waiting to be acquired for the incremental value of your installed base and maybe your technology.

+++So what can Apple do but accomodate the competition?  Their high-end machines have only 10-20% premium against comparable PC workstations, and some of their notebooks are really great deals. +++

To be honest, I don't know what they can do.

One idea I have is to buy Red Hat, put the Mac UI on top of it and offer it as a logical Wintel alternative.  Because to be honest, I've used KDE and Gnome and they, well, suck.  They don't suck terribly but they're primitive compared to XP and the Mac OS.

But this strategy involves Apple finally getting out the proprietary hardware space and they've never been able to bring themselves to do it.

rick

rick chapman
Thursday, August 28, 2003

I hate to be a spelling nazi but godamn it really annoys me when people write "looser", "loosing", etc when they mean "loser", "losing".  ONE FREAKIN O.

Goddamn!

Mister Fancypants
Thursday, August 28, 2003

Why bother buying Red Hat? 

Darwin, the BSD-based kernel of Mac OS X, already runs under x86. 

Why port to Linux?

Mister Fancypants
Thursday, August 28, 2003

+++I hate to be a spelling nazi but godamn it really annoys me when people write "looser", "loosing", etc when they mean "loser", "losing".  ONE FREAKIN O.

Goddamn! +++

Blame France!  Old English spelling was fairly straighforward until the croissant eaters arrived!

Let Loose the Poodles of War and Avenge a millennium (or thereabouts) of innocent English writers forced to keep track of stuff like this!

rick

rick chapman
Thursday, August 28, 2003

+++Why bother buying Red Hat?+++

Biggest dog on the Linux block. 

+++Darwin, the BSD-based kernel of Mac OS X, already runs under x86.  +++

TWO Unixs on Intel?

Mass market won't stand it.

Hint: eventually, it won't stand for more than "one" Linux and one interface.

rick

rick chapman
Thursday, August 28, 2003

And you missed that "rein" vs. "reigns" mistake!

You're French, right?

rick

rick chapman
Thursday, August 28, 2003

If you think I am that dangerous for a company, that people must run in fear lest I gain power, that is up to you.  Remember my name so you can run to a CEO and show him my post, so he knows to keep me in the trenches.  Perhaps you'll gain consulting fees.

My point was that the excerpts I read were analytical.  "Don't be stupid" was their message.  Well, ok.  Except there aren't too many geniuses around who care about managing under some big company their entire lives and executing both dull and bold assignments with ease.

What should I take home from this book?  "Know your market?"  "When you're doing business, learn business?"  You must feel like Prometheus.

Anyway, you mention you've been in marketing and sales.  In chapter 8, you show a bias for marketshare, and you do it again here when talking about Apple.  Do you always concentrate on marketshare to the exclusion of overall profitability?  Do you think that maybe you've had too many incentives to win each single sale, if only bumbling management weren't too STUPID to let some slip?  Well, you should probably check out Nagle/Holden's book on pricing, because it helped me out of that marketshare bias.

Annoyance aside, I'd buy your book if I were wheeling & dealing with product strategy in a large company.  But until then, I'm not interested because those details don't currently seem particularly enlightening, though I'm glad you wrote the book.

Tayssir John Gabbour
Thursday, August 28, 2003

Rick,

See...You should have listened to me. It's pointless.

Not me
Thursday, August 28, 2003

Blah, I need to get out more.  For some reason, I felt the reply was much more condescending than it was.  In reality, it was reasonable, and I wasn't.

Tayssir John Gabbour
Thursday, August 28, 2003

"TWO Unixs on Intel?

Mass market won't stand it. "

I don't buy that.  The mass market won't stand ONE Unix. 

The 'Unix' has to be hidden..  Which is what Apple already did on its hardware and what would be easier for them to accomplish just using the x86 Darwin core. 

By using the Mac OS UI you're already throwing out all existing Linux applications so that isn't even an issue.  Due to the way X11 works, you can't just automatically translate them into nice Carbon-looking apps without porting each and every widget toolkit over (Qt, gtk, motif, etc).

I see no value in a Red Hat purchase.  In fact, to me it smacks of the kind of stupid business decision your book is about.

Mister Fancypants
Thursday, August 28, 2003

+++If you think I am that dangerous for a company,+++

I have no idea  of your radioactivity relative to your business.

The question is: If you are put in a position of power and decision making, can you function effectively?  Have you learned from the mistakes of the past or are you determined to repeat them all over again?

Do you even know what these mistakes are?  What will happen if you make them?

As I said, grunts don't need to know this.  They march and die where they're told to.

+++My point was that the excerpts I read were analytical.  +++

I hope so!

+++"Don't be stupid" was their message.+++

They're excerpts.  To learn from the book, you must buy/borrow the book and read it.

+++What should I take home from this book?  "Know your market?"  "When you're doing business, learn business?" 

I'm sorry!  You must mean "In Search of Excellence!"  I'm not Tom Peters.

"In Search of Stupidity" talks about specific, stupid things companies did and the consequences they suffered.

In other words, the book offers you the chance to learn from the mistakes of others so that you do not repeat the same mistakes.

+++ You must feel like Prometheus.+++

OK.  I like Greek gods and fancy I look like one!  Works for me.

+++In chapter 8, you show a bias for marketshare+++

I'm not sure that's a "bias."  For most companies, a "bias" for marketshare is akin to you or I showing a "bias" for "breathing."

+++Do you always concentrate on marketshare to the exclusion of overall profitability? +++

No.  Marketshare and profitability are two variables you hope to balance in an attempt to reach an optimum business strategy.

+++Well, you should probably check out Nagle/Holden's book on pricing, because it helped me out of that marketshare bias.+++

Hmmm.  The problem with all these books is that you need to be careful about how you define a "market."  Apple could, by various techniques, proclaim itself the market leader in various "categories," ie, the G5 "market leader."

The reality is that Apple competes in the general desktop computer marketplace and its marketshare has slipped to a level where the company will, in my opinion, soon not be able to attract and hold software developer support, thus dooming the platform. This is a death spiral I have seen other companies go through; MicroPro, for instance.  Even after the company was effectively dead it held on for awhile due to the loyalty of its user base.

+++Annoyance aside, I'd buy your book if I were wheeling & dealing with product strategy in a large company. +++

As I said, if you're not going to be making decisions that impact marketing and sales at your company and have no need to understand these forces, you are right.

rick

rick chapman
Thursday, August 28, 2003

+++I see no value in a Red Hat purchase.  In fact, to me it smacks of the kind of stupid business decision your book is about. +++

That is your opinion.  I see little value in attempting to convince the owners of Intel machines to deal with yet another Unix variant.  History has already demonstrated how that turned out.

However, I think the combination of the market's leading Linux distro combined with the market's most advanced UI would be an intriguing one.  Not a guaranteed success, however.  Apple is a long way down the road to irrelevancy in the desktop computer marketplace.  It will need to gamble, perhaps more than it would like, to turn the tide.

rick

rick chapman
Thursday, August 28, 2003

"The problem with all these books is that you need to be careful about how you define a 'market.'"

I first need to know -- did you read that book?  It's called _The Strategy and Tactics of Pricing_.  Its ch. 9 is all about segmenting and defining the right markets.  In fact, the entire book argues that setting pricing is one of the last things to do, guided by a holistic view of the customers you want to reach, your product and costs.  It also has many case studies, including horrible mistakes, without seeming glib.

You dismiss this book, which means you've read it.  But the above statement sounds like you haven't -- could you remove my confusion?

Tayssir John Gabbour
Thursday, August 28, 2003

Red Hat's presence in the home desktop market is negligible. 

If Apple ever did move to x86 I'm certain they'd use the x86 Darwin core, and that would be the right decision.

I still see no benefit from using Linux.

Mister Fancypants
Thursday, August 28, 2003

Anyway, since I don't have anymore time for this, let me plug this other book and make my point clear.  It argues:

1) Targetting a smaller marketshare isn't a bad thing, as long as the costs and profitability agrees, and there aren't long-term forces at work like the network effect in IT.  After all, not every watchmaker wants have the large marketshare of Swatch or even Rolex.  Apple is currently in this category after being hit hard by bad leadership who didn't mesh with the brand, and Apple is retrenching.  Of course they want high marketshare; I don't have the quote on me, but one of the senior VPs at Apple stated their highest priority is finding ways to increase marketshare.  Since they can do this trivially by price-cuts, clearly they have obstacles like preserving their brand.

I've already mentioned Apple's moves to reduce the deadly network effects, which you are perceiving as a natural threat, but are actually specific to the IT industry.

2) Marketing and sales often are focussed too deeply on marketshare, because their incentives are often unaligned with the company's overall strategy.  Hence comments like yours, where you say that marketshare is like "breathing."  That is a stereotypically salesman point of view.

In fact, the reason why I'm only interested in buying your book later is that I perceive this bias, and its use to me is to get an insight into the minds of any salespeople I will need to work with in a large company.  That way I can discuss on their terms.

Anyway, I wish you luck in selling books.

Tayss
Thursday, August 28, 2003

Regarding the value of a book of anecdotes - it's a *perfect* gift for a subordinate to give a decision maker. Why? Because your favorite PHB can read it and laugh at "those idiots at IBM"

Then when your PHB wants to release a software package without doing a trademark search, or put out two incompatible software packages, you can quietly whisper "remember those guys at IBM? You're following in their footsteps with this one..."

Might not work. But if that doesn't, nothing will. Start sending out resumes.

Philo

Philo
Thursday, August 28, 2003

"Mass market won't stand it.

Hint: eventually, it won't stand for more than "one" Linux and one interface."

I hate to disagree (never having read your book and feeling total sympathy for any writer forced to defend themselves from vicious attacks), <g> but Im going to.

This actually strikes me as both a glib and an inaccurate answer.
The whole apple part aside (people have been soothsaying the demise of apple pretty much since they started doing business, maybe they are right and maybe they are not but it hasn't happened yet), this particular answer really shows a lack of understanding about the Linux market.
The most important thing to understand is that the 'mass market' never decides anything, individuals decide things.
Sometimes they do so based on what they believe the 'mass markets' needs are, other times they do it based on a funny feeling in their toes.

In the case of Linux, up until now the individuals that have decided what to create have been geeks doing stuff they enjoy, and its fun to build GUI's, so there are now a bunch of them.
More recently big business (IBM, Sun etc) has begun investing in Linux and they are choosing one desktop environment and running with it.
<g> Big Business being what it is they are generally choosing different desktops to differentiate themselves.

My point?  the opinion of the mass market is genuinely unimportant in this situation, the mass market does not have a mind, the mass market does not make decisions, the mass market doesn't even have one single opinion, it has thousands, and some of them dont use computers.

Talking about the 'mass market' is glib, but unrealistic.

My prediction?  look at the stats for the popularity of web bloggers, notice how the share of readers they get isn't evenly spread (5 bloggers, 20% each), instead its wildly uneven (I forget the technical term and Im too lazy to reach for my stats book) with the top bloggers being read by 90% and the second top being read by 40% and the next read by 10% and everyone else read by 0.01%  <g> or at least you get the idea.

Overtime I suspect that computer operating systems are going to be spread like that...they basically already are with windows in the lead. _If_ windows ever loses that lead to Linux (personally I believe this is inevitable, but lets not start that particular flame war again here) then not only will the differing operating systems be spread like that, but within the Linux chunk the popularity of the various desktop environments will be similarly spread.

FullNameRequired
Thursday, August 28, 2003

+++I first need to know -- did you read that book?  It's called _The Strategy and Tactics of Pricing_.  +++

Yes, I read it several years ago.  It's a good book.

+++In fact, the entire book argues that setting pricing is one of the last things to do, guided by a holistic view of the customers you want to reach, your product and costs.+++

And there's the rub.  Apple's customers are people who want to buy a PC for their desktop.  Now, what is Apple's argument for buying their machine instead of a Wintel box?  Cheaper?  No.  More software?  No.  Cheaper to upgrade and accessorize.  No.  More stable OS?  It's a draw.  Better interface?  Slight advantage to Apple.

Compelling reason to buy Apple?

None.

What is Apple"s niche?  CGI creation a la SGI?  Doesn't look too promising.  A server box?  Isn't Linux making the big splash there?  Education?  Their market share in K12 is collapsing.

They have made headway in the music creation niche and still hold onto the print market.  Is this a long-term strategy for growth?

Can't see it.

Pricing is important, but only one factor in the equation.  If you're going to retreat to a niche, that niche must be real and defendable.

rick

rick chapman
Thursday, August 28, 2003

Other notes on Apple.

The mistake is thinking Apple is a PC company.  If you've been paying attention, Apple is quickly becoming a digital music company that happens to make PCs (iPod, iTunesMusicStore).

Secondly, Apple should dominate the Unix workstation market.  There's no reason why they shouldn't be the one to eat Sun's lunch, along with Linux.  You can run Office on a Mac, but not Linux.  They're focusing on the multimedia and scientific apps they need to dominate here.

Thirdly, don't discount the Reality Distortion Field.  Who knows what market Steve wants to get into next.  But whatever it is, the RDF garuntees that it will have a staggering amount of coverage in the press.

Jim Rankin
Thursday, August 28, 2003

+++Red Hat's presence in the home desktop market is negligible.  +++

But its presence in the mind of the market is considerable.

+++If Apple ever did move to x86 I'm certain they'd use the x86 Darwin core, and that would be the right decision.

I still see no benefit from using Linux. +++

People are interested in Linux.  Linux is viewed as a potential, viable rival to Wintel.

Apple is not, and talking about BSD and yet another Unix variant would simply confuse everyone.

rick

rick chapman
Thursday, August 28, 2003

+++The most important thing to understand is that the 'mass market' never decides anything, individuals decide things.+++

This ignores realities, like the mass market stampede to Windows 3.X I describe in "Stupidity" in the chapter on OS/2.  Why did Windows 3.X do so well?  Because it was available, affordable and worked.  Well enough.  The  PC market as a whole was primed to move quickly to a GUI based OS and once the momentum to Windows grew people dragged other people along.

Markets and market movements exist.  You see it every day on Wall Street.

+++In the case of Linux, up until now the individuals that have decided what to create have been geeks doing stuff they enjoy, and its fun to build GUI's, so there are now a bunch of them.+++

That's nice, but what is the reason why corporate America and even some desktop users are thinking about Linux? Is it because they want to make geeks happy?

I think it has more to do with things like MSs ignoring the historic pricing realities of desktop OSs (described in the chapter on OS/2 and in First Movers, First Mistakes and thinks like its software assurance program.

+++Overtime I suspect that computer operating systems are going to be spread like that...they basically already are with windows in the lead. _If_ windows ever loses that lead to Linux (personally I believe this is inevitable, +++

It is far from inevitable and will never happen unless there is one Linux, one install and only one need to buy an application for the purposes of installing stuff.

If the computing platform migrates to a server/browser paradigm, things may change.

rick

rick chapman
Thursday, August 28, 2003

If Apple mentioned Unix at all (beyond throw away lines in trade mag ads "Unix Stability", etc) it would confuse people.  They aren't a "Unix company" despite the fact that the core of OS X is BSD based.

Apple's only viable product in this market would be "Mac OS X x86".  Not "Linux with a Mac Interface, except when you run any Linux programs that weren't ported to our GUI Toolkit they will look like they do on any other Linux box, and not like our nice Mac Interface.  Oh and they'll behave differently too, so forget about cut and paste and stuff".

THAT NAME WONT EVEN FIT ON THE BOX!!

Given that, whether it runs Linux or Darwin underneath means nothing to the consumer -- so why use Linux when Darwin is a closer match to the other levels of the Mac OS X and is already ported to x86?

I *still* don't see it.

Mister Fancypants
Thursday, August 28, 2003

+++The mistake is thinking Apple is a PC company.  If you've been paying attention, Apple is quickly becoming a digital music company that happens to make PCs (iPod, iTunesMusicStore).+++

I have been paying attention.  I suspect Apple wants to be Bose or B&O or something like what Gateway is trying build and I suspect this is the path they will take out the PC market.

rick

rick chapman
Thursday, August 28, 2003

i really think rick is missing the point on apple. Jim rankin is close, but slips up by mentioning standard "computer" tasks at all. Apple is now a "lifestyle brand." They are not in the same space as Microsoft or Dell, they are in the same space as Sony and the Banana Republic. 

rz
Thursday, August 28, 2003

I'm convinced that Apple could survive if they realized that desktop (and server) hardware is becoming a commodity and their strength is software and funky industrial design.

One possible strategy would be for them to port OSX to Intel, and then have two divisions - software (for OSX, etc) and consumer electronics which might also make boutique PCs as well as ipods, etc.

Apple could easily take advantage of their strengths, but sadly, I tink Rick is right - they don't exactly have a history of capitalizing on opportunities.

Burninator
Thursday, August 28, 2003

"It is far from inevitable"

actually IMO that was the least interesting part of what I said.

"and will never happen unless there is one Linux, one install and only one need to buy an application for the purposes of installing stuff."

absolutely not true (sorry).
The nice thing about linux is that vendors can (if they have the resources) differentiate their offering by placing a pretty desktop design on top.
This _will_ happen, and is happening now. (IBM, Sun etc etc)

If they do not do this then Linux is a disaster for them, because there is no other way to differentiate their offering from that of their competitors (other than service) and so the competition drives the price down beyond what is commercially useful for big companies.

"If the computing platform migrates to a server/browser paradigm, things may change."

?? interesting change of topic.
<g> luckily I have an opinion on that as well...

god save us from such a travesty.
Luckily it will never happen :)  The market is too big, it makes some sense for companies to use this paradigm for particular things, and it works well for delivering certain types of services but it will never make much sense to the home owner, and the disadvantages for many, many types of services and software products are hard to overstate.

FullNameRequired
Thursday, August 28, 2003

Careful, Rick.  Some may take your book as implying, "If you disagree with me, you're stupid."  Maybe some people here may have been tripped up on this subliminally when replying to you. ;)

An interesting theme is when a company acts stupid even when its people aren't.  Did you talk about what it was like in these companies, and the influences contributing to such bad mistakes?  From the negative comments here, I'm sensing that some readers would like a sense of context, though I haven't personally read through your book yet.

sammy
Thursday, August 28, 2003

And here I was thinking JOS was starting to just be noise.
Love this thread. Keep it up.
Regs,

James Ladd
Friday, August 29, 2003

Regarding Apple's market share:

Ric, I have to disagree that a market share of 3% means you're toast. Does the 0,000001% meals served market share of a 3 star restaurant mean they are close to gone? No. Some of these are doing extremely well.

What can be a problem is market change. When the micro computer market emerged in the early eighties, because more and more people were seeing real value in what came out of the hobby market, traditional mini/workstation market could not provide a solution, whereas Apple could. Why? These mini companies where geared up to selling high value items at a premium. Every time we bought a Sun or Digital or SGI etc. There was a whole round of onsite salespeople vying for that one sale from every one of these companies. At $50.000 a pop this was woth it. If their salesperson closed on 1 machine a week, he alone was bringing in a revenu of $2.500.000 a year.
This doesn't work when your items go for 2.000$. You can't afford your sales model, your distribution channel is inadequate, ... Now you're in trouble, since structuraly changing your company is one of the hardest things to do, with the odds being extremely in favor of failure. Most of the minicomputing companies crumbled to dust. Sun survided because they managed to change to a pure server model, where their comany model could survive.

Sun got a stay of execution over the Internet bubble. Time will tell but I believe we are currently watching the dead trows of one of the last of their ilk. They succeeded in changing their target, but they did not succeed in changing their company structure. Now they are facing the brick wall on the target alley.

Apple on the other hand was in better position to take advantage. They could shape their company model at the start of a more recent growth market. Not that that is an easy thing to do. We all know a good many companies fail when they are taking growth hurdles, but it is more doable than the other thing.

Now, to return to the restauration analogy, us computer jocks could argue Apple is more like a former 3 star restaurant that has long since turned to serving microwave dinners on fancy plates with some fresh organic herb decorations, but they have managed to create an incredibly strong lifestyle brand with a devout following. Note that their computer business is still operating according to the original model, but they seem to succeed in tacking on a second company, fully  embracing the quality brand lifestyle company model.

Just me (Sir to you)
Friday, August 29, 2003

Ric wrote: "The problem with all these books is that you need to be careful about how you define a 'market.'"

Ric, this is my point exactly. I think the easiest thing is to imagine yourself in a Microsoft board position. Which are the companies you are thinking about, and see as the major treaths? Is it the ones on soft*letter's list, or the ones on mine? Now mine was hastily constructed, and I am sure someone with more time on their hands can do a better job. The point would still be that taking the pure software play criterion as a delimitation of a competitive market to show competitive dominance in what for lack of a better word I named "bitspace" is a hopeless distortion.

Just me (Sir to you)
Friday, August 29, 2003

an interesting sidebar: Sun survives because of a contract they have with AOL. 60% of Sun servers go directly into an AOL datacenter.

name withheld
Friday, August 29, 2003

+++Did you talk about what it was like in these companies, and the influences contributing to such bad mistakes? +++

No, and deliberately so.  That is another book.  Actually, I don't talk about people that much UNLESS the specific actions of an individual, like Phillipe Kahn's love affair with objects or Ed Esber's PR ineptitude contributed directly to the catastrophe.  ISOS is designed to show you what the company did, why what it did was stupid, what the consquences of the stupidity were and gives suggestions when appropriate as to how not to BE stupid.

rick

rick chapman
Friday, August 29, 2003

+++Apple is now a "lifestyle brand." They are not in the same space as Microsoft or Dell, they are in the same space as Sony and the Banana Republic. +++

Unfortunately for Apple, as their shrinking market share indicates, people use their computers to do things they need done.  It is nice to have a well designed box or lamp base clad in exciting colors, but more and more people seem more interested in price, functionality and the availibility of software.

Now, if you're talking a cool looking MP3 player and things like that, design/coolness may play an equal role in the desirability index as coolness.

rick

rick chapman
Friday, August 29, 2003

+++Apple's only viable product in this market would be "Mac OS X x86".  +++

But, and this is my opinion, I don't think this is a viable product.  It is a product that missed its window of opportunity by about 13 years.  If this product had been released in 1989, 1990 or even perhaps 1991 it might have been a different story.

Now, it's a big yawn.  Hey, the Mac OS runs on your Intel box!  It has an interface that looks somewhat like Windows XP but the icons are prettier, runs a lot less software than Windows, is proprietary, and its foundation is yet another incomprehensible Unix variant called BSD.

Who is going to support this OS?

Answer: Very very companies.

Now, considering the buzz surrounding Linux, the story might be different.

Might be; I do not claim to know.

It would be a gamble, but when you're down to 3% markeshare (and shrinking) you sometimes have to throw the dice.

rick

rick chapman
Friday, August 29, 2003

+++Is it the ones on soft*letter's list, or the ones on mine? +++

Joel's list WAS a software one and I decided to not add hardware to the mix because I believe that software wags the hardware tail.  As I pointed out, while Dell, on paper, is about the same size as MS and IBM is certainly bigger, who is the more significant company?  Who do we all obsess about?

Dell for instance, is a box assembler.  They are NOT a significant technology company but a master manufacturer.

Sony makes a lot more camcorders and TVs and stereos than they do computers.

rick

rick chapman
Friday, August 29, 2003

+++Now, to return to the restauration analogy, us computer jocks could argue Apple is more like a former 3 star restaurant that has long since turned to serving microwave dinners on fancy plates with some fresh organic herb decorations, but they have managed to create an incredibly strong lifestyle brand with a devout following. +++

Apple's market share is SHRINKING.  This is a fact.  It has shrunk steadily over the years and fewer and fewer people are buying Macs.  Yes, the Mac base is devout, but it is not growing, it is shrinking.

Let me give you a practical example of what I mean.  In my daughter's schools, there are Apples all over the place.  They are OLD Apples.  The school is replacing the old Apples with new Wintel boxes.

My daughter's friends, with one exception, are all little IM junkies.  They chat and gossip on Wintel boxes.  ONE of her friends has an Apple.  It is an OLD Apple and the next box her parents buy will be a Wintel box.

K12 was an Apple stronghold but they are losing market share rapidly, as I pointed out earlier.

This is simply not a harbringer of long term success.

rick

rick chapman
Friday, August 29, 2003

+++absolutely not true (sorry).
The nice thing about linux is that vendors can (if they have the resources) differentiate their offering by placing a pretty desktop design on top.
This _will_ happen, and is happening now. (IBM, Sun etc etc)+++

The facts seem to be different.  Linux MUST and is undergoing an inevitable consolidation.  That's what the United Linux movement is all about.  They're hoping to survive the Red Hat march to Linux dominance by pooling their resources.

How many people really want to sit down in front of Linux boxes and have to learn X number of different interfaces to do the same thing?

Let's see, do I shift click to refresh the icon?
Or is it ctrl-click?
Maybe alt-click?

Not a feasible situation.

rick

rick chapman
Friday, August 29, 2003

Re: Market share

No doubt Mercedes and Porsche will be going out of business real soon now. Sure the Fords and Chevy's have a bigger market share. So what?

http://www.oreillynet.com/pub/wlg/591

UI Designer
Friday, August 29, 2003

"Unfortunately for Apple, as their shrinking market share indicates, people use their computers to do things they need done."

People use a car to get places they need to go.  They need furniture in their house and clothes to wear.

But being a necessity doesn't mean people don't put stock into fashion, lifestyle, comfort, and cultural factors when making those purchases.  True, it will always be impossible to compete against Made in China for volume, but there will always be a need for people also to spend money to differentiate themselves for whatever reason.

Actually, I'm pretty sure Apple's consumer marketshare has been gaining somewhat.  They should dominate the creative professional/science/engineering workstation space (they have no excuse not to).  And they're trying to open a crack into the enterprise (Xserve is quite impressive, actually).

As you mentioned, their biggest problem is education.  And I don't see how they'll crack this space with their current strategy as it's extremely margin sensitive.  They tried to do it with PowerSchool, but just didn't execute.

So the education market might be their downfall.

Jim Rankin
Friday, August 29, 2003

+++No doubt Mercedes and Porsche will be going out of business real soon now. Sure the Fords and Chevy's have a bigger market share. So what?+++

Porsche.  A balls to the wall speed machine.

Now, who are  high-tech's ultimate speed freaks?

The gamers.

What do they buy (or build)?

Souped up Wintel boxes.

Do gamers care about Macs?

Not really.

Mercedes is a mainstream car manufacturer.

What is Apple's niche?  "Lifestyle" sounds nice, but computers are bought to do things.  Not simply look pretty.

Print and prepress?

Not enough, IMHO.

rick

rickchapmam
Friday, August 29, 2003

Hi Rick,

"How many people really want to sit down in front of Linux boxes and have to learn X number of different interfaces to do the same thing?

Let's see, do I shift click to refresh the icon?
Or is it ctrl-click?
Maybe alt-click?

Not a feasible situation."

no? ah well.  <g> so who will create the "One Linux to Bind Them All" then?  RedHat? SuSe? Lindows?  ...I wonder which companies will bow out....

I have a strong suspicion we are arguing using different measuring sticks....if 95% of the 'mass market' moves to one particular brand of linux and the rest end up using windows, osx and some lesser Linux brands, Im betting you would claim to be proven correct, the interesting thing is that so would I....

Its reminiscent of the argument against developers developing for the mac, ie that 97%(?) of users are using windows software so focusing on mac users is stupid.
The counterargument is that I _can_ make a living writing software for only 3% of the market because that 3% of the market is actually huge in terms of actual people.

The country I am currently living in, New Zealand, has only 4 million people within it, whereas the mac market is 27 million people (? thats a vaguely remembered statistic, feel free to bring up the correct one).
There are entire industries in New Zealand that make wonderful profits each year, have much larger overheads and _much_ fewer customers than any Linux distributor I can think of.

My final point?  1% of the computer market is actually a perfectly respectable number of users.,...0.5% isn't bad either...we dont _need_ to worry about what the mass market does, we only need to worry about whether our computer/desktop or software will attract enough people to make our business run.

FullNameRequired
Friday, August 29, 2003

+++no? ah well.  <g> so who will create the "One Linux to Bind Them All" then?  RedHat? SuSe? Lindows?  ...I wonder which companies will bow out....+++

The guys at United Linux think it's Red Hat.  They're a good candidate, as far as I can tell.

+++if 95% of the 'mass market' moves to one particular brand of linux

and the rest end up using windows, osx and some lesser Linux brands, Im betting you would claim to be proven correct, the interesting thing is that so would I....++++

While highly unlikely, were this miracle to occur, I WOULD be proven right.  Now, you could CLAIM you were "right" as well, but that claim would lack credibility.  Once you've hit 95% market share you are now a monopoly, as is MS in the desktop OS market, and while any market can, and often does split the remaining share amongst a group of irrelevant competitors, the key word here is "irrelevant."

+++ie that 97%(?) of users are using windows software so focusing on mac users is stupid.+++

It's not a matter of stupidity but economics.  As the Mac's market share declines, it becomes increasingly difficult for software developers to support it.  Developing for the Mac is NOT significantly cheaper than for a Wintel box, yet you cannot hope to recover your investment in development via volume of sales.  So you either A) pull out of the Mac market, as has happened and IS happening or B) charge more for your applications.  Which only increases the desirability of Wintel boxes.

+++The counterargument is that I _can_ make a living writing software for only 3% of the market because that 3% of the market is actually huge in terms of actual people.+++

I do not think the Mac has a future as "life style" box which is supported by people doing very expensive custom development for individuals.

+++1% of the computer market is actually a perfectly respectable number of users.,...0.5% isn't bad either...we dont _need_ to worry about what the mass market does, we only need to worry about whether our computer/desktop or software will attract enough people to make our business run. +++

Again, to survive by retreating to a niche, you must define a niche that is economically supportable and defendable.

No one here has been able to do this.

rick

rickchapmam
Saturday, August 30, 2003

Hi Rick,


"The guys at United Linux think it's Red Hat.  They're a good candidate, as far as I can tell."

great :)

"the key word here is "irrelevant."

ahh...and therein lies the key to this entire debate I suspect.
Ive noticed that its often difficult for market analysts to understand that there _is_ life outside the 'mass market'

Im not sure how to explain the fallacies in this clearly, but a good place to start is by point out that _every_ innovative idea that eventually gained "mass market" approval, came forth from the niche market.
MS included :)
I have a deep distrust of anyone who claims a technology is irrelevant merely because its not popular, that is blindness at its worst.

"yet you cannot hope to recover your investment in development via volume of sales."

yes you can.  I can think of many examples, most of whom eventually moved to include the wintel market.  That was _not_ a rejection of the mac market, despite the fact that so many media analysts seemed to believe it was.

"I do not think the Mac has a future as "life style" box which is supported by people doing very expensive custom development for individuals."

<shrug> The difference between you and steve jobs is that you  have never created a successful company. 
<g> without wanting to be rude, your lack of understanding of the mac niche is prolly a part of the reason for that.
Apple _is_ a successful business, it has a good turnover and makes a ridiculous amount of money every year.  Oddly enough, some years are better than others.
Market analysts have been predicting the collapse of Apple since it started _because_ they are actually unable to understand what keeps it going.

"Again, to survive by retreating to a niche, you must define a niche that is economically supportable and defendable.

No one here has been able to do this."

actually I suspect they have.  The fact that you wont accept their suggestions does not mean they have failed.
There is clear proof that apple has created a niche for itself in the very fact that apple is a perfectly successful business :)

Really though, the "apple is about to die" argument has been done over and over by far smarter people than myself, and doesn't really interest me all that much (I already do x-plat development and dropping one operating system would be more of a relief than anything).

I would be much more interested in discussing your thoughts on Linux, what makes you so confident that only one desktop will survice, surely if there is room in the market for >1 operating system there is equally room for >1 Linux desktop?

FullNameRequired
Saturday, August 30, 2003

Well said FNR. Apple's revenue for 2003 3Q was over $1.5B - up 8% from previous year.

It seems to me that some people 'just don't get it' with respect to Apple's business. Believe it not, some people will buy expensive, better quality goods because they like them. When I drive to the office each day, I stop at Starbucks and drop $4 on cup of coffee. I am _not_ going to stop at the convenience store to pick up a 79c cup of monkey puke no matter how much they super size it. I have no problem going to Brooks Brothers and spending $65 on a shirt when I want one. I don't go to WalMart to buy one for $12 and have it fall apart of 3 washings. Similarly, I am _not_ going to buy a Dell/Gateway or whatever for $500 because they have a bic disposable quality about them. They just don't cut it for me.

I would suspect that most people buying a PC for the first time do not even comparison shop and actually try different PCs (including Macs) in, say, CompUSA. No, they are more likely to buy whatever their closest 'knowledgable' relative or friend recommends and thus can turn to for assistance when the thing won't print or send email or scan photos. The decision will have just about nothing to do with value for money, ease of use etc..

UI Designer
Sunday, August 31, 2003

+++ahh...and therein lies the key to this entire debate I suspect.
Ive noticed that its often difficult for market analysts to understand that there _is_ life outside the 'mass market'+++

You've been reading the wrong analysts!  The whole thrust of marketing over the last twenty years, particularly high-tech marketing, has been increasing market segmentation and finding niches.

However, the niche must exist.

+++Im not sure how to explain the fallacies in this clearly, but a good place to start is by point out that _every_ innovative idea that eventually gained "mass market" approval, came forth from the niche market.+++

I think it would far more accurate to say that innovative ideas sometimes spring from small markets.  The PC, from the first days of the Altair, was never conceived by many people to be a "niche" product.  Ed Roberts, Steve Jobs, Adam Osborne, George Morrow, etc., etc, all conceived of themselves selling tons of computers to millions of people.

IBM may have THOUGHT PCs were a niche but they were clearly wrong.

+++ have a deep distrust of anyone who claims a technology is irrelevant merely because its not popular, that is blindness at its worst.+++

I'm not sure Apple has "a technology."  It is (primarily) a manufacturer of computers for the masses.  At one time they developed products that were ahead significantly ahead of its competition in terms of the technology they incorporates.  They lost that lead.

Now, Apple relies mainly on industrial design and its shrinking installed base to survive.

Again, what are the compelling advantages to buy a Mac over its Wintel competition?  Cool colors?  Interesting shapes?

Not that compelling.

What is Apple's significant and compelling technology advantage over its competition?  Speed?  A GUI interface?  Support for laser printing?

+++yes you can.  I can think of many examples, most of whom eventually moved to include the wintel market.  That was _not_ a rejection of the mac market, despite the fact that so many media analysts seemed to believe it was.+++

No, ceasing development for the Mac, or putting Mac development on the slow track while the company's primary resources are dedicated to Wintel is the rejection.

And this has happened and is continuing to happen.

+++The difference between you and steve jobs is that you  have never created a successful company. +++

Uh, how do you know that?  And off the point.

+++Apple _is_ a successful business, it has a good turnover and makes a ridiculous amount of money every year.+++

Apple is mildly successful, sometimes, and does not make a ridiculous amount of money.  The company seesaws between profitability and unprofitability.  It's core business is not growing and we all know why.

+++actually I suspect they have.  +++

I don't think so.  "Lifestyle" sounds like one of those marketing buzzwords geeks like to accuse weasels of constantly throwing around to obfuscate issues.  Please define the characteristics of a "lifestyle" PC market.  Is the "lifestyle" PC used to date women?  Decorate cars?  Apartments?  Do you wear your Mac on shirts with French cuffs?

+++I would be much more interested in discussing your thoughts on Linux, what makes you so confident that only one desktop will survice, surely if there is room in the market for >1 operating system there is equally room for >1 Linux desktop? +++

Because places like corporations do not want to support multiple interfaces; they spend a great deal of time forcing standardization on the Wintel standard.  Because multiple interfaces means multiple iterations of documentation, increased support issues, installs, possibly even multiple versions of the same product for different Linux "varieties."

The industry has been here before.

Not only is consolidation inevitable, it is happening.  Weaker Unix distros have already dropped away and United Linux was created to allow a group of weaker players to fight it out collectively with Red Hat.

rickchapmam
Sunday, August 31, 2003

+++I have no problem going to Brooks Brothers and spending $65 on a shirt when I want one. I don't go to WalMart to buy one for $12 and have it fall apart of 3 washings. +++

Your cheap, fast, powerful Dell box which costs a lot less than a pretty Apple will not fall apart (statisically speaking).  It will survive long enough to become a profound environmental hazard.

Apple's compelling advantage here?  I don't see it.

rick

rickchapmam
Sunday, August 31, 2003

"Apple's compelling advantage here?  I don't see it"

:)  Obviously not.

FullNameRequired
Sunday, August 31, 2003

And obviously, no one seems able to tell us what it is.

rick

rickchapmam
Sunday, August 31, 2003

"And obviously, no one seems able to tell us what it is."

I would love to, I really would, but Im not sure what I could say that others haven't already told you.

Ill give it a shot....

(1) OSX (and mac classic in its day) _just works_
I plug stuff in, and it goes, I never have viruses, I gave an imac to my grandfather and he loved it and used it everyday pretty much without problems (whereas his old windows machine always seemed to have problems, to the point where he had just about decided he was simply too old to 'get' computers).

I have a few clients for whom I provide computer support in a desultory kind of fashion, one of them are a graphics design type place filled with macs, they pretty much need no work at all from week to week, just once a month or so I wander in and tell them off for forgetting to replace the backup tapes and explain why its so important.  (literally once a month, and yet these are intelligent people....)

I also provide support for 3 windows shops.  There is _always_ a computer or two there waiting to be fixed, problems with this and that....all small stuff but its neverending....christ help me and the patches that are required, there is _always_ another patch to put in....

Its hard to explain because on the face of it both mac and windows computers provide all the same services...the interfaces these days are both relatively friendly (comparing xp - osx) but underneath the mac is just more stable, easy to use and pleasant to work with.
(OSX being a pretty big improvement over classic in terms of developing in of course, love that unix core...)

Have you read Joels article here on..something...I forget which, he talks about a job he had throwing packets into trolleys or somesuch and how on some days lots of small things would go wrong, and he would finish the day feeling annoyed and frustrated while on others he would be fine.  On average I get a _lot_ more pleasant days out of my mac than I do from my wintel boxes.

<g> and they look cool too, and come in fancy yet pleasant shapes, and are all surprisingly portable, even the imacs and towers, and the many, many cords are mostly packaged away and the hardware is almost always of very high quality indeed.

My computer is a tool, and my experience is that when using a mac _mostly_ the tool gets out of my way and helps me do my work, whereas on a wintel box I spend nearly as much time wrestling with the tool as I do with the problem.

This is _not_ mean to be an attack on windows or linux, on the whole I am pretty OS agnostic, I develop x-plat, and often recommend wintel boxes to my clients if I think they will fill their needs.
This is merely intended to be a vague explanation of why _I_ choose to pay more for apple computers myself, and why I consider the money well spent.
<g> its perfectly possible Im the 'victim' of good marketing, and if so then I happily accept that in exchange for the satisfaction I get fro musing a macintosh computer.

FullNameRequired
Sunday, August 31, 2003

Just another thought...

I use my computer a _lot_, its 5 am here and Im about to head off to bed, Ive been in front of this sodding machine now since 7:30 am yesterday morning with ~ 5 hours off for various lunches, dinners and I believe I spoke to my wife at some point.

Ill sleep in today until approx lunch time (joy of being my own boss) and then Ill prolly work through until dinner time again, possibly longer if Im feeling particularly stupid.
On any given week I literally spend something between 40-100 hours in front of computers.
Some days I _really_ hate them, other days I can still feel a twinge of the enthusiasm I felt when I first started.

my point?  small differences in ease of use _matter_ to me, Im finishing up after a particularly bloody day now and Im still liking my machine.  Its hard to overstate the importance of this.

FullNameRequired
Sunday, August 31, 2003

What do you want us to say?  Apple hasn't eroded while Jobs was away?  Apple's history is a sequence of discrete events.  Very few of us frankly know if Apple will survive, because we don't have the numbers or distributor info -- especially since Apple is notoriously secretive.

And while I think there are rational aspects to their strategy, not all of them I'd agree with.  For example, dropping support of old Mac versions.  This caused a lot of value buyers to weigh the alternatives -- an $800 Dell with MSOffice bundled, or $1500+ Mac with MSOffice a $400 upgrade.  Plus at that time, Apple's processor future looked shaky.  And I don't know what's up with attacking their developers like Karelia and Adobe, though platforms will always clash with their developers.

Anyway, Apple has a number of advantages.  Their boxes keep value, so Ebaying an 800MHz machine will fetch a surprising amount.  Apple's service blows Dell's out of the water.  Dell's support has been steadily declining, since they apparently believe their consumer market is insensitive to that; while Apple stores are staffed with friendly local people who seem to care about Apple's reputation.  Simply put, people actually like using Macs.  And developers can count on a market which is actually willing to part with money.

I'm told that Powerbooks are definitely bargains and smartly marketed.

Windows will never have Apple's control over hardware, even though Microsoft has done as good a job as anyone can expect.  Obviously there's a tradeoff there, since I like choice, but the average person will see a lot more reliability with Macs, especially since PC device drivers are often crappily written.  I suspect Apple works carefully to have well-written ones.  Dell in theory could do this too... but they don't and won't.

Now, Apple has had a lot of time to let Windows catch up.  In terms of usability, I personally believe WinXP is often better.  So it's not like anyone reasonably thinks Apple has a lock on their market.  I couldn't care less about iPods or built-in video editing software... well maybe the video editing can come in handy.

Their Java strategy doesn't seem to be working so well.  Developers are finding that programming in plain Swing is pretty bad on Windows, so Mac won't be getting crossplatform apps for free.  Same with Unix; from what I hear, Linux apps appear ugly and don't work perfectly when ported.  OpenOffice won't be ported until v2. 

Anyway, interesting times lie ahead.  As Gates said in todays NYT, "We're doing our very best, and that's all we can do."  What do you want, Apple to have a perfect position Right Now?  Do you think that you alone care about Apple's marketshare?

Tayssir John Gabbour
Sunday, August 31, 2003

(1) OSX (and mac classic in its day) _just works_

This argument has been made in favor of the Mac since its inception.

Since the introduction of Windows 3.X in 1990, the combination of price, choice and sufficient usability has steadily eroded Apple's market share to 3%.

This does not appear to be a compelling niche nor a defendable one.

Also, it ingores certain historic realities.  Up till the release of the Mac's new OS with its Unix foundation, the Mac OS was far inferior to NT in terms of its stability.  The Mac OS throughout the 90s was an increasingly patched up and unstable mess.  It was, perhaps, somewhat better than the Win 9X base, but not much better.

(There was an option that was superior to both the Windows versions and the Mac in the 90s: OS/2.  One of the best examples of how bad marketing trumps technical excellence.)

Now, OS X is certainly competitive with NT/XP, but XP is a stable OS.  Again, there is simply no compelling argument to buy Apple.

+++why _I_ choose to pay more for apple computers myself, and why I consider the money well spent.+++

I'm glad that you like Apples and that they peform well for you.  I've owned them in the past and will probably buy one in the future.  I enjoy playing with different systems and OSs.

But alas, from a marketing standpoint, I'm a bad example to base a development decision on.

And the reality is that less and less developers are choosing to develop for Apple.  Little innovative new software comes out first on Apples.  It's increasingly a stepchild in the market and I think Apple is looking to, within the next two to three years, exit from the market and reinvent itself as a true "life style" company selliing a version of the Mac OS that integrates, well, "stuff."

It either that, or some sort of Open Source gambit.  I believe if the Mac UI were put under the GPL it might sweep the primitive KDE/Gnome interfaces away.

rick

rick chapman
Monday, September 01, 2003

Hi Rick,

"Since the introduction of Windows 3.X in 1990, the combination of price, choice and sufficient usability has steadily eroded Apple's market share to 3%."

thats actually somewhat of a myth, theres an interesting article here:
http://daringfireball.net/2003/07/market_share.html

heres the best bit:
"The idea of overall PC market share, as currently conceived by IDC, is not so much like overall automobile market share as it is like overall motor vehicle market share. It’s like counting everything from golf carts to tractor trailers as a single category, thus making the “overall market share” look worse than it is for a company that only makes actual passenger cars."

also its worth noting separately that the mac market share has actually been increasing more recently, not decreasing.


"This does not appear to be a compelling niche nor a defendable one."
I have no idea what yardstick you are using...maybe you could provide a usable definition of a "compelling niche",  a quick run over of the exact characteristics that make a "defendable niche" would also be useful...

"Also, it ingores certain historic realities.  Up till the release of the Mac's new OS with its Unix foundation, the Mac OS was far inferior to NT in terms of its stability."

I ignore nothing.  <g> I have developed in both and there is no doubt whatsoever that the classic mac was easier to crash.
OTOH Im interested that you are comparing NT (hardcore business computer/server thingie) with os8.6-9 (personal computer).  That doesn't feel like a fair comparison to me.
They are quite different computers aimed at quite different markets.

"It was, perhaps, somewhat better than the Win 9X base, but not much better."

LOL, now I believe its you who is ignoring certain historical realities.  win9x was a total mess, win98SE was the best they had and it couldn't run for a couple of days without tripping over its own feet.
Left on its own the macos8.6+  would run pretty much forever so long as the software you ran on it didn't crash it.  Left on its own win9x would crash by _itself_ after a few days.


"Now, OS X is certainly competitive with NT/XP, but XP is a stable OS.  Again, there is simply no compelling argument to buy Apple."

aww gods, I _really_ find these arguments boring...but Im going in...
OSX, right now, is in my experience approx 10x more stable than XP.  XP _is_ a good step up from most of the other windows OS', but its still got a long way to go before it can seriously rival the various *nixs around.  Personally I always had a soft spot for NT...
In terms of usability XP is vastly better than anything else Microsoft has to offer, but IMO its still noticeably worse than OXS.
We are of course arguing subjective stuff now, so please dont anyone else turn this into a flamewar.

"And the reality is that less and less developers are choosing to develop for Apple."

interesting...Im interested in exactly what figures you are basing this sweeping statement on?  my impression is that there is a huge amount more software availavle for osx than there ever was for the classic os.
Even without counting all the OSS software that is available for mac now, there still seems to be much more software out there.
What statistics are you using?

"I think Apple is looking to, within the next two to three years, exit from the market and reinvent itself as a true "life style" company selliing a version of the Mac OS that integrates, well, "stuff.""

??? I have no idea what you mean here.....exit the market and continue selling the macos? 

"It either that, or some sort of Open Source gambit.  I believe if the Mac UI were put under the GPL it might sweep the primitive KDE/Gnome interfaces away."

LOL, ya think?   

FullNameRequired
Monday, September 01, 2003

The one argument Rick keeps ignoring is the fashion-computer market.  Do people buy Apples to decorate their apartment?  ABSOLUTELY.  Is this a sustainable market?  Not sure.

Also, you need to be at least as hard on every other PC company besides Dell.  Apple certainly has a more defensible position than Gateway, and probably more so than the PC divisions of HP, IBM and Sony (and what other PC companies are left?).

They are all trying to sell the same commodity, but none can hold a candle to Dell in commoditizing the PC.  And any argument for differentiation gives you the same arguments against Apple.  They all run Intel and Windows, so where's the advantage?  Besides, MS WON'T ALLOW any PC maker to differentiate themselves, even after the anti-trust rulings, I bet.

So if you're not Dell and you're trying to sell a box called a PC, I'd rather be Apple than anyone else.

Jim Rankin
Monday, September 01, 2003

A 1.5 billion dollar niche sounds both compelling and defensible to me.

bobbyblue
Monday, September 01, 2003

+++OTOH Im interested that you are comparing NT (hardcore business computer/server thingie) with os8.6-9 (personal computer).  That doesn't feel like a fair comparison to me.
They are quite different computers aimed at quite different markets.+++

Well, actually, they weren't, as I point out in "In Search of Stupidity."

"It was, perhaps, somewhat better than the Win 9X base, but not much better.

+++LOL, now I believe its you who is ignoring certain historical realities.  win9x was a total mess, win98SE was the best they had and it couldn't run for a couple of days without tripping over its own feet.
Left on its own the macos8.6+ +++

Win 9X was a massive success (though a smart marketing group COULD have given MS some major problems had they realized what they needed to do) and Mac OS 8.X is, what? 98/99?

So for years Apple is selling a flaky OS while MS is offering a Windows variant that's stable?

Hmmm.

+++OSX, right now, is in my experience approx 10x more stable than XP.  +++

Well, I see no respected studies that indicate this level of superiority.  Win XP has been universally praised for its stability and it doesn't seem to crash much.

+++Im interested in exactly what figures you are basing this sweeping statement on?  +++

Excellent up-to-the moment research!  I get Mac Warehouse and PC Warehouse catalogs.  Boy, the PC Warehouse catalog has a lot more PC software in it than the Mac one does.

I go to CUSA all the time to get a feel for the retail space and I have one of those beautifully merchandised Apple stores in an upscale mall near where I live.

I always go in it.  It's so clean and white and  Futurama.  And you never ever have to wait on a long line to buy something.  And the shelves for Apple software have lots of one back versions of games and not as many titles as the PC shelves at CUSA.

+++??? I have no idea what you mean here.....exit the market and continue selling the macos?  +++

I suspect to "transition" the Mac OS into an embedded system that runs the convergent electronic system of the future.

+++LOL, ya think? ++

Yup.  And it would be a hoot to see and comment on!

rick

rick chapman
Monday, September 01, 2003

+++Do people buy Apples to decorate their apartment?  ABSOLUTELY.  Is this a sustainable market?  Not sure.+++

Boy, and they call ME a marketer.

I can see the new Apple advertising campaign now!

The Continental:

My sweet, come up to my lair of love where you will feast your eyes on my aluminun wrapped, dual processor G5 (G for Gigantic) Mac system with OS X mounted on top of an utterly secure BSD foundation.

Girl:  Wow.  Let's copulate!

rick

rick chapman
Monday, September 01, 2003

+++thats actually somewhat of a myth, theres an interesting article here:
http://daringfireball.net/2003/07/market_share.html+++

I find it very interesting that this article notes Mac market share has shrunk to 2.3%.  I was being rather generous with my 3% estimate.

(As an aside, my editor while I was writing "In Search of Stupidity" challenged my use of the 3% to 4% estimate.  She may have been right!)

+++you could provide a usable definition of a "compelling niche",  +++

Sure.  Our computers are absolutely, positively, the fastest on earth.  No questions.

Our computers are higly optimized for high- speed CGI rendering for movie creation.

There's a couple.

Now, what's Apple's niche?

rick

rick chapman
Monday, September 01, 2003


"They are quite different computers aimed at quite different markets.+++

"Well, actually, they weren't, as I point out in "In Search of Stupidity."

umm...Im not sure how to respond here.  They _were_ quite different computers and they _were_ aimed at quite different markets. 
Im fascinated that you somehow managed to argue yourself into thinking anything else...

"Win 9X was a massive success (though a smart marketing group COULD have given MS some major problems had they realized what they needed to do) and Mac OS 8.X is, what? 98/99?"

umm...no. win9x was a massive _marketing_ success.  It sold a lot of units.  It was also a total mess of an operating system, and far less stable than mac os8.x
The mac had other flaws that needed to be addressed but weren't until osx (the biggest being that a flaky application could bring the entire system down without even trying hard)

the win9x system had the same problems of course, but not so bad.  However, it was _also_ far less stable when left by itself.
That operating system was a real mess, win98SE wasn't so bad but as a rule leaving any of the win9x systems running for more than a couple of days was guaranteed to cause it to slowly grind itself into the ground.

"Win XP has been universally praised for its stability and it doesn't seem to crash much"

interesting that even you qualify that statement with "as much"

Win XP _is_ more stable than any other version of windows has ever been, as such it has earned the praise.
It absolutely cannot be compared with the stability of _any_ of the *nix's, the unix variants are a much more mature, far more stable operating system than windows.
...and of course osx is built on top of one of them.


" Boy, the PC Warehouse catalog has a lot more PC software in it than the Mac one does."

It certainly does.  OTOH your statement was that there were fewer (innovative) mac developers now than there used to be, Im not sure how this particular statement proves that?
Has the Mac version got fewer titles available now than it used to have?  fewer _innovative_ titles?

"I suspect to "transition" the Mac OS into an embedded system that runs the convergent electronic system of the future."

ye gods, the MacOS as it currently stands would make a bloody stupid operating system to shoehorn into an embedded system.

"I find it very interesting that this article notes Mac market share has shrunk to 2.3%.  I was being rather generous with my 3% estimate."

is that your only comment on this article?  <g> if so, I suspect you may have missed its point....

...compelling niche...
"Sure.  Our computers are absolutely, positively, the fastest on earth.  No questions."

??  why would anyone buy a computer just because of that?....IBM etc have that market cornered and its a _bloody small market_

Even if they went for "fastest consumer pc on earth" theres not much more point, 98% of homeowned computers are used for chat, browsing and email.  You can still do that perfectly well with nearly any computer ever built.

I honestly dont believe thats a particularly useful niche.

"Our computers are higly optimized for high- speed CGI rendering for movie creation.""

another surprisingly small market.

"Now, what's Apple's niche?"

quality?  seems to me thats a niche historically proven to be both compelling and defensible.

certainly works for me :)

FullNameRequired
Monday, September 01, 2003

+++It certainly does.  OTOH your statement was that there were fewer (innovative) mac developers now than there used to be, Im not sure how this particular statement proves that?+++

Actually, it wasn't.  You have misquoted me.  I said nothing about "innovative."

There are certainly far many less Mac developers, Mac titles, Mac computers sold and Mac buyers.  And as opposed to the PC platform, few new titles in new markets appear.

+++umm...Im not sure how to respond here.  They _were_ quite different computers and they _were_ aimed at quite different markets.  +++

Feel free to respond however you wish.  They weren't computers, they were OSs, they basically ran on the same computers, they were named the same thing and they cost about the same.  And they had very much the same functionality.

To understand what an astute marketing group could have done with this, read In Search of Stupidity.

+++umm...no. win9x was a massive _marketing_ success.  It sold a lot of units.  It was also a total mess of an operating system, and far less stable than mac os8.x+++

It was no worse than the Mac OS up till the point that no one cared.

i+++nteresting that even you qualify that statement with "as much"+++

You  must learn not to misquote.

+++It absolutely cannot be compared with the stability of _any_ of the *nix's, the unix variants are a much more mature, far more stable operating system than windows.
...and of course osx is built on top of one of them.+++

Lots of publications and people compare it all the time and Windows XP doesn't seem to crash much.  Dave Cutler seems to have known something about building a high-quality OS.

+++??  why would anyone buy a computer just because of that?....IBM etc have that market cornered and its a _bloody small market_+++

Yes, it is.  A very small market, but that's the nature of niches.  And it's a defendable niche.

Alas, Apple does not occupy it.  The Wintel boxes do.  Gamers care very little for the Mac.

+++"Our computers are higly optimized for high- speed CGI rendering for movie creation.""

another surprisingly small market.+++

Yes, it is.  And not that defendable, as SGI found.

+++is that your only comment on this article?  <g> if so, I suspect you may have missed its point....+++

The historical fact is that Apple's market share is approaching 0%.  The article was full of generalities about market niches and segmentation.

Great marketspeak!  I know all about it.

Now, just define that niche for me.

+++quality?  seems to me thats a niche historically proven to be both compelling and defensible.+++

"Quality."  I am unable to see how the Mac can make a compelling  "quality" claim than the Wintel boxes.  What is "better" about a Mac?  Colored plastic?  Hockey puck mice everone hates?  Better chips?  An aluminum case (plenty of aluminum cases for PCs.  Just watch the gamers!)?

You seem to be arguing against hard facts.  Not even 3% market share now.  2.3%.  Shrinking, shrinking.  Loss of the K12 market on the horizon.

At this point, I believe we must let it at that and allow people to make up their own minds.

rick

rick chapman
Monday, September 01, 2003

"There are certainly far many less Mac developers, Mac titles, Mac computers sold and Mac buyers."

less than on the PC platform?  indeed yes, that has to do with market share :) 

" And as opposed to the PC platform, few new titles in new markets appear"

:)  Thats the biggest load of old bollocks Ive heard.....care to provide some examples of the "new titles in new markets"?


"Feel free to respond however you wish.  They weren't computers, they were OSs, they basically ran on the same computers, they were named the same thing and they cost about the same.  And they had very much the same functionality."

?? They ran on totally different computers, os8/9 ran on Apple computers, NT did not.  They had obviously different names.
I cannot remember the costs, but Im willing to believe you, and the fact that the macos8.x had approx the same functionality as the windows server product is more of an indictment of the windows server product.
(Although personally I do not agree, describing os8.x and NT in sufficiently general terms so as to make their functionality sound similar creates a...very inaccurate...picture).

"To understand what an astute marketing group could have done with this, read In Search of Stupidity."

:)

"It was no worse than the Mac OS up till the point that no one cared."

interesting...so you dont deny that win9x was a total mess, you just believe that because no one cared it wasn't a problem?

MS won that battle by astute marketing, pricing and being in the right place at the right time, this does not alter the fact that they won it with an obviously crap product.

Which is fine, Apple has always been aimed at the niche quality market, and microsoft has been aimed at the 'mass market'.  Both companies have ended up with the market they aimed for :)

"Lots of publications and people compare it all the time and Windows XP doesn't seem to crash much"

I agree.  In my experience however (and I do have a fair bit with both operating systems) it is still far less stabe than macosx. 

"Alas, Apple does not occupy it.  The Wintel boxes do.  Gamers care very little for the Mac."

<shrug> I honestly haven't found a useful method of comparing the computer speeds yet. 
<g> and gamers care very little for the mac because it has fewer titles (because it has a smaller market share), the fact it has fewer titles available has _nothing_ to do with the relative speeds of the computers in question, and everything to do with the wintels greater market share.

"Yes, it is.  And not that defendable, as SGI found."

so we are agreed then?  aiming at that niche would be a genuinely stupid idea?

"The historical fact is that Apple's market share is approaching 0%.  The article was full of generalities about market niches and segmentation."

<yawn>  so is this discussion....you believe then that the market share of apple should be judged not merely relative to the area it is targetting but relative to everything that runs an operating system of any kind?

""Quality."  I am unable to see how the Mac can make a compelling  "quality" claim than the Wintel boxes.

LOL

What is "better" about a Mac?  Colored plastic? 
yes
Hockey puck mice everone hates? 
everyone one?  thats a surprisingly broad generalisation..

Better chips?
yep :)  g5 rocks...

An aluminum case (plenty of aluminum cases for PCs.  Just watch the gamers!)?"
yep :)

the macosx has higher quality hardware, higher quality software and more eye candy :)

Microsoft went for the mass market with cheaper computers and cheaper software, it got it.  Apple went for the niche quality market with more expensive but higher quality computers and software....it has provably achieved its goal.

"You seem to be arguing against hard facts.  Not even 3% market share now.  2.3%.  Shrinking, shrinking.  Loss of the K12 market on the horizon."

Hard facts?  actually all you've given me are statistics.  <g> I used to tell students I was tutoring, statistics are irrelevant until you know exactly what they are supposed to measure and exactly how they were calculated and what assumptions were made while doing this.
The only people who actually believe they mean anything without that information are market analysts and people in marketing.

"At this point, I believe we must let it at that and allow people to make up their own minds."

awww...I was just starting to get interested again.  Ive never argued with someone who believes in statistics before ;)

FullNameRequired
Monday, September 01, 2003

FNR,

you do realize that in this discussion you have uttered about every single typical Mac biggot quote in existance, right?

Rick,

If I were Apple I would not ly awake so much about the declining market share. Markets are projections, not realities. By artificialy delimiting the full economy to a certain subset you hope to gain some insight. You can do this in infinetly possible ways, and in this particular one "Apple is loosing market share!!!". Oh wel.
What would worry me more though is the decline in revenue that Apple is experiencing. Now there is a factual data point that the Apple universe has shrunk. It is absolute, not relative to some projection. That to me is more clear indication that they, at least for the moment, are not finding a good foothold in the ever changing computing landscape.

Just me (Sir to you)
Tuesday, September 02, 2003

"you do realize that in this discussion you have uttered about every single typical Mac biggot quote in existance, right?"

have I?  good lord.

funny thing, Im really not a mac bigot.  I use windows every day for testing and developing, also providing support to others...and mostly rather like it, when alls said and done from a developers POV most of the operating systems are surprisingly similar...they all do pretty much the same stuff, in general only the api and working paradigm change.

Which means I dont think Ive ever bothered to enter into, or even to follow, other arguments of this type, mostly they bore me silly.
So if Ive been repeating typical mac bigot quotes willy nilly, put it down to a lack of experience arguing in this area, I obviously dont know what arguments have been used before...

I actually joined this thread by arguing the Linux side of things......in hindsight I have no idea how I ended up arguing the mac side of this stupid argument.

FullNameRequired
Tuesday, September 02, 2003

+++What would worry me more though is the decline in revenue that Apple is experiencing. Now there is a factual data point that the Apple universe has shrunk. +++

Well, I guess that's just another "statisic" and doesn't mean much!  And probably has no connection at all to Apple's declining market share.  After all, "relative" to the Amiga's, Apple is doing a HUGE business.

So all is for the best in this best of all possible worlds.

rick

rick

rick chapman
Tuesday, September 02, 2003

"Well, I guess that's just another "statisic" and doesn't mean much!  And probably has no connection at all to Apple's declining market share.  After all, "relative" to the Amiga's, Apple is doing a HUGE business."

<g> _now_ you are just baiting me....

I really dont see how you can claim that a business that made a $1.5 _billion_ profit in the last financial year is one step from bankruptcy and going to have to exit the market in the near future.
...seems to me that apple is doing fine...

...I must admit, if I were going to make prophecies regarding the computer market I would be looking much more closely at the Linux/Windows debate, pretty much every argument you have used for windows against apple could also be used for Linux against windows...with the added bonus that with Linux moving further and further into the desktop market windows has _no_ compelling and defensible angle it can use against Linux.
Its more expensive, still slightly better quality desktop but the Linux desktops are improving in leaps and bounds, uses exactly the same hardware _and_ is losing market share at a small but increasing rate to Linux.

"So all is for the best in this best of all possible worlds."

yeah, I reckon so :)

FullNameRequired
Tuesday, September 02, 2003

http://australianit.news.com.au/articles/0,7204,7136841%5E15306%5E%5Enbv%5E,00.html

FullNameRequired
Tuesday, September 02, 2003

+++I really dont see how you can claim that a business that made a $1.5 _billion_ profit in the last financial +++

Ah, hemm.  Apple did not make a 1.5 billion "profit."

You are mistaking revenue for profit.  They are not the same thing.

rick

rick chapman
Tuesday, September 02, 2003

"You are mistaking revenue for profit.  They are not the same thing."

sorry..misspoke myself....


I should have said/meant to say:

"I really dont see how you can claim that a business that made a $1.5 _billion_ revenue in the last financial year is one step from bankruptcy and going to have to exit the market in the near future."

be specific in your reasoning :)

FullNameRequired
Tuesday, September 02, 2003

Also the $1.5 billion is for last fiscal quarter - it's around $6 billion (estimated) for 2003

UI Designer
Tuesday, September 02, 2003

"Also the $1.5 billion is for last fiscal quarter - it's around $6 billion (estimated) for 2003"


LOL...aww gods, Im going to bed....

..nite all...

FullNameRequired
Tuesday, September 02, 2003

Oh I forgot, Apple also has cash assets of $4.5 billion.

UI Designer
Tuesday, September 02, 2003

+++"I really dont see how you can claim that a business that made a $1.5 _billion_ revenue in the last financial year is one step from bankruptcy and going to have to exit the market in the near future."

be specific in your reasoning :) +++

I have been!  And factual as well.  But, these things are often of little interest to the true believer.  They believe what they choose, regardless of the facts.

rick

rick chapman
Tuesday, September 02, 2003

"I have been!  And factual as well."

umm, what?  ..no you haven't...

  "But, these things are often of little interest to the true believer.  They believe what they choose, regardless of the facts."

LOL, catch 22 eh?  nice move...

but actually your point is a valid one, the true believer often refuses to dig beyond the scope of their understanding in case it forces them to change...

FullNameRequired
Tuesday, September 02, 2003

+++umm, what?  ..no you haven't...+++

Ummm, uh, yes I have.

No misquotations, no mistaking one type of financial figure for another, pretty accurate market share figures, accurate reports on financial consequences.

And, of course, I have an extensive understanding of marketing issues like the positioning conflict MS unleashed with NT vs. 9X which I have studied closely,  something few here have done.

Not really disputable points.

But I don't have time to try to persuade a true believer of reality.

Especially Mac believers!  They remind me of the OS/2 crowd, who, up till the moment the ship went under, insisted that that was no iceberg, that was just a big polar bear.

rick

rick chapman
Tuesday, September 02, 2003

"Not really disputable points."

but thats a bizarre statement, nearly everything you said was reasonably disputable.

You said:
"TWO Unixs on Intel?
Mass market won't stand it."

_thats_ disputable, you provided absolutely no further information of any kind to back that up.

"Hint: eventually, it won't stand for more than "one" Linux and one interface."
_thats_ disputable, the companies that are switching to Linux are choosing different flavours all over, its a big world and different flavours are proving popular in different companies.

"The reality is that Apple competes in the general desktop computer marketplace and its marketshare has slipped to a level where the company will, in my opinion, soon not be able to attract and hold software developer support, thus dooming the platform. This is a death spiral I have seen other companies go through; MicroPro, for instance."

_thats_ disputable, the differences between MicroPro and Apple are legend, including the actual turnover.  6 _billion_ a year is not peanuts and cannot be ignored, however much market analysts try to.

"Apple is a long way down the road to irrelevancy in the desktop computer marketplace.  It will need to gamble, perhaps more than it would like, to turn the tide."

_thats_ disputable, and you haven't provided any useful data to back this up.  reiterating a statement ad mauseaum does not represent a strong argument.


"I suspect Apple wants to be Bose or B&O or something like what Gateway is trying build and I suspect this is the path they will take out the PC market."

_thats_ disputable, Apple has declared its desire to be a part of a 'digital hub' and is moving into other consumer applicances as a part of this process.

"What is Apple's niche?  "Lifestyle" sounds nice, but computers are bought to do things.  Not simply look pretty."

amazingly enough _thats_ disputable.

"I do not think the Mac has a future as "life style" box "

_thats_ disputable.



I can go on and on but basically we have heard a lot of wild opinions from you but very little in the way of actual argument.

<g> and writing me off as a mac 'true believer'  is just stupid.
I am, however, a fan of people who can differentiate between their opinion and facts.
Id like to suggest you work a little harder on that, it can lead people toward innovative opinions and solutions.

FullNameRequired
Tuesday, September 02, 2003

+++"Not really disputable points."

+++but thats a bizarre statement, +++

No, those were facts.  Other things I discussed were, of course, opinions.

+++_thats_ disputable, you provided absolutely no further information of any kind to back that up.+++

Hmmm.  I really shouldn't indulge in this; I have a new book to get ready, but you represent a type that I find interesting.  So, for the last time, I'll take this point by point.

+++_thats_ disputable, the companies that are switching to Linux are choosing different flavours all over, its a big world and different flavours are proving popular in different companies.+++

No, it's really not.  If everyone was so happy with all these different Linux variants there would be ono need for United Linux, now would there.

The PC industry has seen a plethora of different OSs and interfaces and, over time, seen the market consolidate down relentlessly.

This is happening to Linux (not a disputable point, BTW) and will continue to happen.  The market AND software developers are not going to be interested in multiple documenations, support efforts, installs, training sessions, etc etc for Linux.

There are plenty of historical precedents for this but I'm not going to try to make you learn about them.

+++including the actual turnover.  6 _billion_ a year is not peanuts and cannot be ignored, however much market analysts try to.+++

Actually, in the scheme of things, it is.  Hardware companies, as I've pointed out, are "bigger" because their boxes are, on average, more expensive than software.  It is "easy" to become a $1B+ plus company in hardware; much harder in software.  There are many PC manufacturers that became $1B+ companies and faded away almost overnight: AST, Packard-Bell, etc.

There are very few companies that absolutely depend on Macs for crucial business needs.  The system holds out in corporate design departments and pre-press shops and does nothing that can't be done with Wintel boxes.  The company could disappear tomorrow with scarcely a ripple.

This is not to say it will or should but them's the facts.

+++Apple is a long way down the road to irrelevancy in the desktop computer marketplace.  It will need to gamble, perhaps more than it would like, to turn the tide."

_thats_ disputable, +++

No, it is not.  A walk through any business or corporation makes this statement absolutely indisputable.  A 2.3% market share is a defacto statement of irrelevancy.  Again, there are very few companies that absolutely depend on Macs for crucial business needs.

+++"I suspect Apple wants to be Bose or B&O or something like what Gateway is trying build and I suspect this is the path they will take out the PC market."

_thats_ disputable, Apple has declared its desire to be a part of a 'digital hub' and is moving into other consumer applicances as a part of this process.+++

Uh, you DO realize you just agreed with my statement?  No?

Well, never mind.

+++"Lifestyle" sounds nice, but computers are bought to do things.  Not simply look pretty."

amazingly enough _thats_ disputable.+++

Not to rational people.  I'm sure Apple's designs have impacted buying decision but I'm also sure very very few people indeed bought the computer strictly as a fashion statement.  Corporate designers need to design; print people need to print.

+++
"I do not think the Mac has a future as "life style" box "

_thats_ disputable.+++

Only barely.  It will depend on whether Apple tries to reposition itself as "convergence" vendor.

+++Id like to suggest you work a little harder on that, +++

I'd like to suggest that you learn more about the history of the industry so that you can understand why certains things happen and others don't.

rick











rick

rick chapman
Tuesday, September 02, 2003

"My sweet, come up to my lair of love where you will feast your eyes on my aluminun wrapped, dual processor G5 (G for Gigantic) Mac system with OS X mounted on top of an utterly secure BSD foundation.

Girl:  Wow.  Let's copulate!"

You've never watched the crowd at a MacWorld when the Steve speaks, have you?  If that's not seduction in action, I don't know what is.

And you still scoff at the idea people decorate with their Macs?  Look at any design magazine, or any other marketing with a picture of a computer.  It's probably a Mac.

You mentioned other companies sell aluminum laptops.  What you don't realize is that means IT'S NOW YESTERDAY'S FASHION.  It's the equivalent of a new clothing style appearing in WalMart.  Whatever the next computer fashion will be, it'll come from Apple.

Anyway, I don't know why you're all still talking about Apple as a computer company.  I told you all way back in this thread, Apple's just a music company that happens to sell computers.

Just today on a talk radio show I heard someone use the word "iPod" like people used to say "WalkMan", like a generic noun.  Apple is perfectly positioned to own this market.

But given their history, they'll probably find a way to blow it.

Jim Rankin
Tuesday, September 02, 2003

"No, those were facts.  Other things I discussed were, of course, opinions"

which items were facts exactly?

" but you represent a type that I find interesting. "

interesting.  <g> Im beginning to realise that you represent a type that I find frustrating...

" If everyone was so happy with all these different Linux variants there would be ono need for United Linux, now would there. "

?? Of course there would.  There is a _real_ need for the difference Linux variants to move closer together and become less splintered.  This is quite a different statement from "there will be only one"
The 'mass market' _will_ accept >1 Linux distribution because the 'mass market' represents >1 type of requirement.
(This is one of the fallacies that arise when thinking in terms of the 'mass market' and all, and a reason I dislike that type of lazy thinking).
An easy example is the consumer product vs the company server produc. There are quite different products and therefore have quite different requirements.
There are more opportunities than just those 2 of course, but thats a good starting example.

"The PC industry has seen a plethora of different OSs and interfaces and, over time, seen the market consolidate down relentlessly."

absolutely, but its worth noting that _despite_ this consolidation there are _still_ a number of different and viable OSs out there.
The Linux market is still being formed, but it _will_ consist of >1 Linux distribution one it settles down, the market is easily big enough to handle this.
One thing that will come from the consolidation efforts is greater interoperability between those distributions, but thats a different discussion.


"This is happening to Linux (not a disputable point, BTW) and will continue to happen. "

indeed this is not a disputable point, the disputable point is how many distributions this will result in, and whether there are counter forces that are also affecting this process.
The easiest two counter forces to describe are (1) The need for individual companies to differentiate their product and (2) The differing requirements of different areas of the 'mass market'.
...one you recognise that different areas of the 'mass market' have different requirements it becomes obvious that the term 'mass market' itself is a bloody stupid one, the 'mass market' is made of many smaller markets and its both more accurate and more correct to talk about them separately, but again, thats a different discussion).


"The market AND software developers are not going to be interested in multiple documenations, support efforts, installs, training sessions, etc etc for Linux."

indeed not, and thats a good part of the driving force for conslidation, but ther are other forces abroad and its perfectly possible for documentation etc to move together while the distributions themselves are differentiated in other areas.

"There are many PC manufacturers that became $1B+ companies and faded away almost overnight: AST, Packard-Bell, etc."

and yet the mac has shown no signs of doing this despite the fact that market analysts have been predicting that this will happen for years beyond counting.
How long does apple have to continue in business before analysts suchj as yourself begin to understand how it remains there?

"There are very few companies that absolutely depend on Macs for crucial business needs."
The mac has only recently (with the introduction of osx) begun seriously chasing the company market again, whether its ease of use and support is sufficient to make it attractive to companies is yet to be seen.
companies are traditionally not interested in 'lifestyle' type products, individual consumers are however and that is where apple has most of its market share.

"The company could disappear tomorrow with scarcely a ripple."

The same could be said of many, many companies that have very viable incomes and are doing fine business.  This is _not_ a bad thing or a good thing, its just a thing.

"A 2.3% market share is a defacto statement of irrelevancy."

_thats_ disputable.  Linux started out with 0.000% market share, and yet anyone calling it irrelevant would be showing courage and stupidity of a degree rarely seen.

Also of course we are back to looking at what that particular statistic actually means.  Amazing though it must seem to you a statistic is _not_ a hard fact.  Exactly what any particular statistic means depends on what exactly it is measuring.  This is _not_ a clever way of saying that statistic is wrong, it may not be, this simply stating a truth....statistics must be used very carefully and with due care or they end up giving a false picture.
You have used the 2.3% stat without showing any understanding of what it is _actually measuring_.
That feels like a blindness on your part to me.


"Uh, you DO realize you just agreed with my statement?  No?"

? no....the fact that Apple is expanding its expertise and product range in no way proves that it is intending to exit the computer market.

"I'm sure Apple's designs have impacted buying decision"

we are agreed then? good.

"Only barely.  It will depend on whether Apple tries to reposition itself as "convergence" vendor."

:)  Im trying desperately to extract some meaning out of this particular sentence, but its nearly opaque to me..perhaps you would like to expand on this point?

FullNameRequired
Tuesday, September 02, 2003

Or maybe Apple's niche will be "secure computing".

http://www.geek.com/news/geeknews/2003Aug/bma20030902021531.htm

Jim Rankin
Tuesday, September 02, 2003

It is quite predictable that the Linux distributions will follow a power law, so both Rick and FNR are probably right.
Yes, there will be many Linux distributions left, but the top one will have at least an >80% market share and the runner up around 15% with all the others scrambeling for the remaining 5%. It is my personal belief that for this to hold the differences between the top 2 will have to be quite small. If not the feedback loops will only grow the top player to >90%.

Sidenote for Rick: Many people here have been around this industry for quite a few years. Not all are stupid.

Just me (Sir to you)
Wednesday, September 03, 2003

Jim,

Let us hope not. Who do you want to have on your side protecting your wife and kids when things get rough? The seasoned samourai covered in scar tissue from having been at war all his life, or the fresh punk whose greatest experience is having seen "Apocalyps Now" 2 times on late night television shouting "Man, those guys are pussies! If I would have been there ...".
Obviously not the samourai since the scars prove he's a looser, right?

Just me (Sir to you)
Wednesday, September 03, 2003

Hi Justme,

"It is quite predictable that the Linux distributions will follow a power law, "

thats my feeling as well.  I actually made exactly that point in one of my first few postings (although I _had_ forgotten the exact term....I completed a 4th year paper on statistics only last year but the information appears to have drained from my brain with the speed of water from a sieve).

An interesting sideeffect of that observation is that it allows us to partially(or totally depending on how much emphasis you want to place on the idea of desktop popularity following a power law distribution) explain the initial success of the Windows desktop environment without using vague terms like 'successful marketing' etc.

<g> social history as a mathematical science, Isaac Asimov would have been proud...
 

FullNameRequired
Wednesday, September 03, 2003

"It is my personal belief that for this to hold the differences between the top 2 will have to be quite small.  If not the feedback loops will only grow the top player to >90%."

now _thats_ an interesting point, and I agree it makes a lot of sense.

FullNameRequired
Wednesday, September 03, 2003

+++You've never watched the crowd at a MacWorld when the Steve speaks, have you?  If that's not seduction in action, I don't know what is.+++

Ah.  Then Apple's niche market consists of people with overly active libidos?

+++And you still scoff at the idea people decorate with their Macs?  Look at any design magazine, or any other marketing with a picture of a computer.  It's probably a Mac.

You mentioned other companies sell aluminum laptops.  What you don't realize is that means IT'S NOW YESTERDAY'S FASHION.  +++

You know, sometime it gets good, and sometimes it gets REALLY good.

Programmers arguing to a marketing guy that Apple's niche is...fashion designers.

I smell TV show!

Geek Eye for the Straight Guy!

+++Anyway, I don't know why you're all still talking about Apple as a computer company.  I told you all way back in this thread, Apple's just a music company that happens to sell computers.+++

Well, they've made a few mil on Itunes, but I don't think that replaces their current business model.

They have made some inroads into the digital music software space.

I do believe, as you point out, that they are considering becoming some form of ubertech consumer electronics firm.

rick

rick chapman
Wednesday, September 03, 2003

+++which items were facts exactly?+++

I'm sorry, but you are now in "True Believer" mode.  You'll just have to read the past messages, shift into "Rational" mode and I'm sure it will become clear to you.

+++?? Of course there would.  There is a _real_ need for the difference Linux variants to move closer together and become less splintered.  This is quite a different statement from "there will be only one"+++

Assuming that Linux somehow miraculously chases Windows off the desktop, there will indeed be one, for the reasons already cited.  I'm sure there will remain hobbyist versions and personal variants but they will be irrelevant from a business standpoint.

+++(This is one of the fallacies that arise when thinking in terms of the 'mass market' and all, and a reason I dislike that type of lazy thinking).+++

If you wish to not think of the home and business markets, both of which have standardized on Windows platforms which are now converging on a single underlying "platform" (the interfaces converged some time ago) as "mass markets," be my guest!

This, of course, is not a rational belief, but you are now in True Believer mode.

+++absolutely, but its worth noting that _despite_ this consolidation there are _still_ a number of different and viable OSs out there.+++

There are not.  On the PC desktop, there is Windows, there is, barely, Mac OS and there MIGHT be Linux.  There's a bit of Unix floating about, ie, Solaris.  A trace of SGI.  Barely registers, of course.  Nothing else counts.

In the server space, there are the Unix variants which are being subsumed by Linux, there is Solaris, there is IIS and there is Linux.  Who ultimately wins?  Apple would like to compete there but I think it's way too late for them to do so.  Another missed opportunity.  But, as I said, a Red Hat/Apple gambit might shake things up!

I don't know who wins in the end.  But there will be a winner.

There's the embedded space, of course, but I don't follow it that closely so I won't comment.  Ditto for mainframes and what's left of the minis.

+++and yet the mac has shown no signs of doing this +++

Uh, yes, it does show signs of doing this.  Apple is not growing as a company, it is slowly shrinking.  It is living off its installed base but this base is slowly dissipating.

+++You have used the 2.3% stat without showing any understanding of what it is _actually measuring_.
That feels like a blindness on your part to me.+++

Well, I think most people here understand what it's measuring.  I COULD tell you, but I think it would be helpful for you to do that yourself!  This will help shock you out of True Believer mode into Rational Mode and that would be a good thing!

+++Im trying desperately to extract some meaning out of this particular sentence, but its nearly opaque to me..perhaps you would like to expand on this point? +++

Best you explore this for yourself.  First, I heartily recommend you purchase a copy of my latest book, In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters.  Read the chapter on positioning, OS/2 and the introductory chapter carefully.  In positioning, study the discussion of Win NT vs. 9X with particular attention.  This will give you a historical background on many of the marketing issues discussed here.

Then visit a B&O or Bose store.  Also, investigate carefully what Gateway is trying to do as Dell chases them out of the corporate market.

When you have done these things, you will be ready to take this conversation to the next level!

rick

rick chapman
Wednesday, September 03, 2003

" Obviously not the samourai since the scars prove he's a looser, right?"

I think you just answered your own question (assuming you meant "loser").  Just because the samurai keeps getting the crap beat out of him doesn't make him a good fighter.

Kinda like asking "Who do you want on your side in a fight, the kid who gets beaten up and his lunch money taken every week, or the kid nobody messes with 'cause they just KNOW he's one bad dude?"

Jim Rankin
Wednesday, September 03, 2003

"Also, investigate carefully what Gateway is trying to do as Dell chases them out of the corporate market."

Gateway is trying to be just like Apple, except without the technology, design sense, innovation, creativity, brand, or Reality Distortion Field.

Do I qualify for the next level now?

Jim Rankin
Wednesday, September 03, 2003

"Geek Eye for the Straight Guy!"

First rule:  only ever wear black turtlenecks and faded jeans.

Jim Rankin
Wednesday, September 03, 2003

"Just because the samurai keeps getting the crap beat out of him doesn't make him a good fighter"

Well actualy it does. Every time some l33tcr3w succeeds in finding a chink in the armour it gets mended. Maybe 1/3 to 2/3 of the admins out there do not apply the patches, but for the willing and able admins that is one more hole covered. For the true cracker, that cares less about fame than gain, this means one less tool in his arsenal.
Despite massive casualties, the value of the "discovery" a public attack brings us is also there.
Currently new OS'es such as OS X have for the most part not had these benefits. Selecting these for security is relying on obscurity. It is putting you life savings in the puny schoolboys lunchbox hoping nobody will bother to look there.

Just me (Sir to you)
Wednesday, September 03, 2003

Rick,

In a post above you said:

"If you wish to not think of the home and business markets, both of which have standardized on Windows platforms which are now converging on a single underlying "platform" (the interfaces converged some time ago) as "mass markets," be my guest!"

I was wondering how this ties in to your earlier statement:

"The whole thrust of marketing over the last twenty years, particularly high-tech marketing, has been increasing market segmentation and finding niches."

It seems to me that the point made above about different groups having different requirements ties directly into this.  If you want an effective marketing approach that lets you maximize the number of sales you make as well as the return you get on each sale, you need to be able to segment the market easily.  Appearing to tailor your product to the needs of your client seems to be the best approach to doing this.  Certainly, as a supplier, you want your solutions to be convergent to minimize your expenses and investment, but it seems dangerous to let the marketplace treat your product that way.  In other words, it doesn't seem to be enough to "find niches" you should actively try to "create niches."

So, aside from Linux and Macs and all that, I'm wondering what you think about this in general marketing terms.  I don't think I'm understanding what you are saying since the above statements seem to be in conflict.  Can you clarify?

anon
Wednesday, September 03, 2003

+++"Also, investigate carefully what Gateway is trying to do as Dell chases them out of the corporate market."

Gateway is trying to be just like Apple, except without the technology, design sense, innovation, creativity, brand, or Reality Distortion Field.

Do I qualify for the next level now? +++

No!  You must first demonstrate you have read my book.  ONLY THEN will your mind be pure enough to move to the next level of enlightenment.

rick

rick chapman
Wednesday, September 03, 2003

+++In a post above you said:

"If you wish to not think of the home and business markets, both of which have standardized on Windows platforms which are now converging on a single underlying "platform" (the interfaces converged some time ago) as "mass markets," be my guest!"

I was wondering how this ties in to your earlier statement:

"The whole thrust of marketing over the last twenty years, particularly high-tech marketing, has been increasing market segmentation and finding niches."+++

You must wonder no longer, but instead make the committment to go down the path of enlightenment so that you may, one day, if you work hard enough and reach a state of suitable spiritual purity, be able to grok the zen of high tech marketing.

It is a long path, a weary path, a HARD path, but when you arrive at it's end I will be there to chant a few kones at you and sign a copy of my book!

First, of course, you must study scripture.  That means you must go out and seek a copy of In Search of Stupidity and read it carefully.  Commune with it.  Burn incense while you do this; this will help project your mind to a higher plane of consciousness.

Then you must begin a series exercises that I, your sensei, request you perform!

Your first exercise is go out to a car.  Sit in it.  Gaze upon the dashboard.  Think about what you see.

Your next exercise is to go sit in a DIFFERENT car.

Gaze upon the dashboard.  Think about what you see.

Your next exercise is to go sit in a DIFFERENT car.

Gaze upon the dashboard.  Think about what you see.

Your next exercise is to go sit in a...well, you get the idea.  Do this about, oh, twenty or thirty times.

THEN you must buy, oh, 10 car magazines.  Grok them carefully.  Think about the types of cars, the prices of cars, the CARNESS of cars.

Then you are to plunge naked in a lake of freezing water and wait for enlightenment to hit you!  No cheating, now.  We want to see a picture of you jumping into the icy depths.  I suggest you take the picture in a place where a convenient iceberg or polar bear can be seen in the background; this will convince us all of your committment to a higher spirituality.

Let me know when you have completed your exercises and dried off.

We will then test your spirituality to see if you are ready to proceed to the next level of higher awareness.

rick

rick chapman
Wednesday, September 03, 2003

Hi Rick,

Thanks for the answer, I think.  I thought it was a fair question, though maybe I did not explain it well.  I have to say, though, that if the material that is in your book is anything like the answer you gave to my question, I don't think a purchase is anywhere in my future.  A marketing blunder, perhaps?

Awright, you took a swing at me, and now I've swung at you.  Now that the macho bullshit it over, I'd really like to hear your opinion (or anyone else's) on the question I raised in my previous post.

anon
Wednesday, September 03, 2003

+++Awright, you took a swing at me, and now I've swung at you.  Now that the macho bullshit it over, I'd really like to hear your opinion (or anyone else's) on the question I raised in my previous post. +++

Actually, this reply was intended for another person; this system's lack of threading makes it hard to track who's saying what to whom.

However, believe it or not, I have answered the question.  YOU do not, however, have to jump in the cold water.

Think about what I have said.  The answer is pretty apparent.

rick

rick chapman
Wednesday, September 03, 2003

+++"Geek Eye for the Straight Guy!"

First rule:  only ever wear black turtlenecks and faded jeans.+++

You are a fashion God!

Uh, OK to wear the occasional collarless shirt?

rick

rick chapman
Wednesday, September 03, 2003

The material you quoted in your reply was from my question, so I assumed that the rest of the reply was directed at me.  My apologies.

Okay, from the reply I gather you're saying that the car "platform" is standard and stable, four wheels, a steering wheel, internal combustion engine, etc.  Somewhere back in the day the car platform converged on this basic configuration, and it changes pretty slowly.

Given this "platform," the car manufacturers create/seek segments by providing variations of one sort or another on this theme.  The car market sustains multiple vendors because there are enough ways to effectively distinguish one car from another that no one vendor can cover all the bases.  I think I get that, too.

So what prevents something similar from happening in a market like Linux?  A bunch of vendors converging on a Linux core, but producing variations tailored to different sets of requirements.  Maybe vendor A makes Linux distributions to host kick ass web servers, while vendor B produces a variation optimized for use as a database server.  There are large numbers of special purpose configurations. 

Maybe you could optimize the OS for use with a single brand of database and sell the OS/database as a package.  You could tell your customers, "with our OSDB combo, we can process X transactions per second using only 5 machines.  If you choose the general purpose OS and DB configuration from our competitors the same level of performance will require X+2 machines."  Then you bust out some TCO numbers on hardware, show 'em how using an optimized system increases the mean time to failure at the same time as it decreases the mean time to repair, slap up some graphs and whatnot to dazzle 'em, and then hound 'em until you close the deal.

Couldn't vendors that are getting stomped by Red Hat try a strategy like this to differentiate themselves and lock up at least part of the market? Or is something like this un-sellable? 

Disclaimers:
I have no idea what is salable - I've never sold anything in my entire life.  Also, I'm not a Linux user, so I don't know how different a linux build optimized for database use is from a general purpose build.  In fact, now that I think of it, I don't know much about anything at all.

anon
Thursday, September 04, 2003

"Couldn't vendors that are getting stomped by Red Hat try a strategy like this to differentiate themselves and lock up at least part of the market? Or is something like this un-sellable?  "

Thats exactly right, its already been done in particular areas (specialist firewall boxes and game consoles for instance) but like you I can see other possible opportunities, specialised database boxes and specialised web server boxes are two of the most obvious examples but I have no doubt there are other possibilities available for the imaginative person.
Specialised boxes for non-computer users maybe, simplified beyond belief with only (for eg) email, web browser and word processor software available and very obvious and easy ways of switching between them, Im imagining the entire file system hidden as much as possible and the hardware shipped with the OS so they dont have to worry about drivers etc.
Prolly none of these would have a particularly big market share overall (<g> thus presumably rendering them 'irrelevant') but the opportunities are there and its not a big step to imagine individual vendors specialising in particular types of operating systems.

IMO this is one of the big advantages Linux has over windows, with the source code freely available developers are limited in what they can do with it only by their imagination.

FullNameRequired
Thursday, September 04, 2003

Rick,

are you afraid that if you gave a straight answer to any of the questions people have put to you, you might loose sales on your book?
Don't worry. The way this board works there is only just about five of us still reading this thread, and I doubt the that tactic will bear fruit on any of us.

Just me (Sir to you)
Thursday, September 04, 2003

hmm...actually I thought rick was doing pretty well up until recently.
<g> despite the fact that Ive disagreed with a lot (all?) of his ideas and theories.
(although I admit to being disappointed by his decision to write me off as a 'true believer'....and Im vaguely wondering _what_ it is that Im supposed to believe so strongly in..)

Honestly though, I think its taken a lot of courage for him to tackle a lot of grumpy techies, particularly when you consider the scathing attack (which has since been apologised for) which led him to initiate this thread in the first place. 

perhaps this particular thread has gone as far as it usefully can....although it does seem a shame to end the discussion on the potential for niche markets, which genuinely interests me...

FullNameRequired
Thursday, September 04, 2003

+++So what prevents something similar from happening in a market like Linux?  A bunch of vendors converging on a Linux core, but producing variations tailored to different sets of requirements.  Maybe vendor A makes Linux distributions to host kick ass web servers, while vendor B produces a variation optimized for use as a database server.  There are large numbers of special purpose configurations+++

It depends on what you mean by "the core."

If the vendor wants to bundle applications that differentiate their product, fine.

However, if they wish to create multiple versions of the underlying platform, as happened with the Unix variants, the market will not accept this.

Novell found this out with its purchase of SV and its attempt to "blend" it with Netware.  Again, a fundamental positioning mistake.  Read about in "From Godzilla to Gecko" in ISOS.

+++Maybe you could optimize the OS for use with a single brand of database and sell the OS/database as a package.  You could tell your customers, "with our OSDB combo, we can process X transactions per second using only 5 machines.  If you choose the general purpose OS and DB configuration from our competitors the same level of performance will require X+2 machines."  +++

You could do this, and perhaps for some highly definable and niche markets you might.  However, you have now created a new product that needs a separate support track, documentation, code maintenance, etc etc.  How many variants are you going to create?  How long are you going to support them.? How are your customers to track this?  We have been down this road before with the Unix variants.

The pressure from customers to standardize is inexorable; the pushback from vendors seeking to "add value" to their products constant.  However, as history shows us, customers, over time, will insist that the underlying platform develop a consistent standard.  Remember, despite all the posturing about Linux chasing Windows out of the market, what's really happening is that Unix variants are being subsumed by Linux.  Why?  Linux is far more standardized than the variants and it runs on a standardized hardware platform.

And aren't these variants part of the GPL? Don't other people have the right to incorporate your optimization into their product?  And wouldn't it be nice for your competition to add this neat new feature into a more standardized product and go to your customers and tell them they can just order "one" Linux and not worry about supporting X  number of variants?

+++In fact, now that I think of it, I don't know much about anything at all. +++

That is OK, Grasshopper!  Your dewey-eyed naivete is as welcome as the cool spring rain splashing off the sun-baked back of an ancient elephant.

rick

rick chapman
Thursday, September 04, 2003

+++are you afraid that if you gave a straight answer to any of the questions people have put to you, you might loose sales on your book?+++

No.

rick

rick chapman
Thursday, September 04, 2003

"The pressure from customers to standardize is inexorable; the pushback from vendors seeking to "add value" to their products constant.  However, as history shows us, customers, over time, will insist that the underlying platform develop a consistent standard.  "

ahh.  <g> now _there_ is a statement I can agree with.

The really interesting thing about the existance of Linux is that it guarantees we _can_ all be working from the same base set, and yet still run customised versions designed for a specific purpose.

To carry on the web server example, it would be perfectly practical (particularly given the relatively modular design approach Linux has used with his 'monolithic' kernel) to strip out code that will not be used, and to adjust the backend stuff for greater specialisation while maintaining the standard api for the code thats left.
(whether this particular example _would_ in fact be technically worthwhile is a different discussion, but a very interesting one IMO).

As Rick points out this was _not_ possible with the old unix variations because the code for each was carefully hidden by the companies who owned it, this meant that it was inevitable that over time they would drift apart and because a bloody PITA to maintain together.


"what's really happening is that Unix variants are being subsumed by Linux."

indeed, and very gradually we are seeing some signs of it pushing Windows out of companies...<g> it will be a long time before we can tell whether this is going to have a real affect on the windows marketshare, but Im betting it will.


"And aren't these variants part of the GPL? Don't other people have the right to incorporate your optimization into their product?"

absolutely :)  whether they would want to or not is another question.....a change that ensures that a database would run at optimum would likely have sideeffects that would reduce performance in other areas.
Its always possible of course for someone to download and compile your product for free, or even to become an expert in it themselves and begin offering much the same service.
As the currently successful Linux distributors show this is not necessarily a problem.
(another possibility is the creation of specialised applications (closed source) to take advantage of your specialised OS, but that would require another whack of upfront capital.
 

"And wouldn't it be nice for your competition to add this neat new feature into a more standardized product and go to your customers and tell them they can just order "one" Linux and not worry about supporting X  number of variants?""

This is broadly true of course but it very much ignores the genuine tradeoffs that need to be made during software design, generally it comes down to a generalisation vs specialisation thing where you get to choose between doing this one thing _really_ well, and others less well, or doing this one thing less well, and others _really well.
An operating system that is aimed at the general market will generally have had sufficient tradeoffs to ensure that there _are_ areas where its performance could be significantly improved if it was known for a fact that it would _only_ be doing tasks x,y and z.

...and of course of the variants themselves were actually still closely based on the standard Linux kernel then the worry about supporting variants decreases a lot.

FullNameRequired
Thursday, September 04, 2003

Awright, I think I am getting a clearer picture of how this positioning argument works, so thanks for the input.  Maybe I'll buy the book after all :P

Let me ask some more questions, though.  Here's a statement that it might be possible to attack:

"And wouldn't it be nice for your competition to add this neat new feature into a more standardized product and go to your customers and tell them they can just order "one" Linux and not worry about supporting X  number of variants?"

The tricky thing that my competition might face in trying to steal my market with this strategy is that it is technically very hard to create an offering that is both a standardized, general solution as well as a specialized, specific solution.  If I create a build that is streamlined and dedicated to a particular function, say "collaboration," my guess is that it would be very hard for a competitor to offer the same level of collaboration performance in a build that can also be used for a web server, database server, firewall, file server, and so on, if I have done my job correctly. 

I could also offer my customer an argument like, "you know, it takes years to achieve mastery in configuring and maintaining one of those bulky, general purpose machines.  Everything on there affects everything else.  It's really complicated. 

Why pay someone to know all that stuff, 80% of which you will never use?  Buy one of our Collaboration.NUX servers.  The number of options you need to understand is reduced by 90%.  We can train one of your sysadmins in a quarter of the time and to a much higher level of understanding, since there is far less to understand.  And you'll still get more bang for your buck out of our machines than those bloated ones the competitor is trying to force on you.  This sleek little number over here just rocks."

You could probably even point to something like Google to back things up.  "Google's not using your general purpose Linux to provide best in class service to its customers, no way.  They have Googlenix running on their machines, streamlined for search!.  Go check out their website and see how many people it takes to maintain their hundreds and hundreds of machines.  You'll see the advantages."

Probably the economics of customization won't allow an approach like this to succeed at present, but this seems like a solvable engineering problem to me.  Maybe not, though.  I still don't think I can see the big picture as clearly as some of you other folks do.  (I know - buy the book). 

anon
Thursday, September 04, 2003

+++The tricky thing that my competition might face in trying to steal my market with this strategy is that it is technically very hard to create an offering that is both a standardized, general solution as well as a specialized, specific solution. +++

Microsoft seems to do it OK.  Besides, aren't we talking platforms?  OSs?

Just how many variants do you think the business market will stand?  One Linux variant for accounting, one for HR, one for you?  Who will keep track of all this?  Document it?  Support it?  Worry about the interaction between all these code bases and snippets and installs.


Answer: No one.  Corporate IT will not deal with it.  The home market certainly won't, aside from hobbyists such as myself who actually load things like VMware on their system so they can muck about.

This is an eternal argument in high-tech.  But standardization always seems to win, long term.

This, BTW, is discussed in In Search of Stupidity in the chapter on OS/2 when I discuss its use of an "embedded" Windows and the Dimension computer of the early 80s.

Now, there is an "appliance" market, certainly.  There you can get away with customized variants since these systems run on pretty much the same business model as embedded systems.

And there will be niches.  There are always niches.

rick

rick chapman
Thursday, September 04, 2003

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