Wednesday, September 01, 2004

Sun blogs

Reader DD sent in a note to this piece on the economics of software from a Sun kernel engineer.

It is quite correct, although I think it overstates a little bit the pain of big corporations at the mercy of evil software vendors. For example, while it is true that once a company has purchased a platform and built on it, they are now locked in (and can get price gouged), it is also true that a company can anticipate this and negotiate a big discount upfront, eliminating the price gouging that's coming down the pipe. Upfront competition (like after market competition) is important in creating substitutes, and thus lowering available economics rents, but often goes unconsidered. Hal Varian's "Information Rules" continues to be the best treatment of how all this stuff shakes out.

To me, the real people feeling pain are the poor schmucks left with trying to use the software that their company just installed. The CFO bought on price (check), the CEO bought on CYA (big name vendor? check), and the CTO bought on a laundry list of acronoym features (check check check). No one bought on usability, and hence, true business value. Couple this with your average business, riddled with complex and imprecise rules, and you get failed implementation, and failed operation. And frustrated users.

It's interesting, and neat, that Sun seems to have so many smart, open bloggers.


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