I'm Brett Slatkin and this is where I write about programming and related topics. You can contact me here or view my projects.

07 May 2010

Zero-sum competition is bizarre

Lately I've realized that what bothers me in many corporations' strategies is the antiquated belief in "zero-sum competition." This is the concept that when your competitor wins, you lose. These companies seek to completely own the customer relationship; the idea is that once the company has a customer they try to extract as much business from them as possible. This strategy has been used by IBM, DEC, Microsoft, Sun/Oracle, and echos the mainframe era of business models.

Zero-sum competition is weird to me because it means the company assumes:
  • they already make everything you could possibly need or
  • you will wait for the company to build a missing piece for you or
  • you can easily integrate products from different vendors together
Often heterogenous integration is difficult or impossible (anyone connect Lotus Domino to MS Exchange lately?), so this last point is often missing or awful. This strategy indicates to me that these companies disagree with the notion that "a rising tide lifts all the boats."

Strangely, this same trend exists in news reporting. Some sites (like SFAppeal) will link to other useful coverage to give readers a full picture. Most other sites pretend like they are the only news source in the universe. It seems to me that many aggregation sites are popular specifically because they connect readers to the diversity on the web.

The contrasting view to zero-sum competition is to embrace the best-of-breed product at all times. This is especially easy to do on the web where the switching cost is low. This is why many users choose Flickr for photos, Gmail for email, and Facebook for social networking.

Beyond consumer products, IT and dev shops also try to make this best-of-breed choice. One could argue that a modern CIO/CTO's primary job is lock-in avoidance. Open protocols like IMAP, OpenID, and LDAP make it easy to switch vendors. Some vendors recognize the need for heterogeneous solutions and implement one-off integrations (like iPhone and Exchange). I personally advocate for people to use both App Engine and EC2 in tandem: They each have strengths and weaknesses and the combination is the most powerful approach.

In the social web a move away from zero-sum competition has already emerged. Life-streaming sites evenly aggregate content from various sources. Microsoft, Google, and others integrate with Flickr and Twitter in many ways. Users expect to blend services and it's weird when sites won't let them. Facebook, even with their one like button to rule them all, allows their competitors to hook into their feed and graph.

I'm not sure what causes people to believe in zero-sum competition. I wonder if it's generational, like how my uncle likes to have his speakers' brand match the stereo. But I see a trend that consumers of all ages are mixing and matching, long-term Apple fanboys are buying Kindles, and Oracle shops are deploying Hadoop. Perhaps we're moving on to a new age of business competition? I wonder where this will go.
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