SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Ignore What’s Bad for Your Competitors: Do What’s Good for Your Customers

Posted by Bob Warfield on November 20, 2007

Competition is such a mixed blessing.  I’ve been involved with companies that were absolutely consumed by competition.  Borland versus Microsoft in the heyday was an epic battle.  I’ve been involved with companies that frankly didn’t have enough competition.  Callidus had to spend most of the money creating it’s market because competitors were largely idle to nonexistant. 

I was reminded of this today while reading another post about SAP’s TomorrowNow business in the Ponderings of Woodrow.  Woodrow describes TomorrwoNow thusly:

For those playing at home, you know that TomorrowNow is a 3rd party maintenance provider that supports Oracle, Peoplesoft, J.D. Edwards and Siebel products at 50% of the 1st party cost. SAP acquired TomorrowNow with the intention of helping capitalize on the F.U.D. factor created by Oracle’s M&A binge.

You can see that last part is what caught my attention for this post.  SAP acquired TomorrowNow in order to work some mischief on the competition.  It did something more because it would be bad for competitor Oracle than because it would be good for SAP’s customers.  That doesn’t mean it wasn’t good for some customers, but you see my point.

I remember being caught up at one time years ago in a discussion about whether to support OS/2 (remember that?) or Microsoft Windows.  It was clear that Windows was both a superior product and that it was starting to beat OS/2, although it hadn’t at the time closed that gap entirely.  I was arguing strongly for Windows because it was what customers wanted.  Others were arguing that writing apps for Windows was providing aid and comfort to the Evil Empire, and that it could not be countenanced under any circumstances.  Hindsight is, of course, 20/20.  We lost valuable time getting to the Windows platform and our OS/2 efforts were completely wasted.

The next time you are tempted by a complicated and all too clever “the enemy of my enemy is my friend” play, think about the customers.  If they don’t truly benefit enough to make the play worthwhile without any anti-competitor impacts, don’t go there.  It isn’t worth it.  Even big companies can’t really afford the loss of attention on the customer.

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