Saturday, July 31, 2010

The value of placement in software and the web

Anybody who has studied marketing will tell you that the experts divide the black arts into 4 P's: product, promotion, price, and placement.  I've always wondered about the value of placement in software and web products.  Unlike physical tangible products like food, toys, and furniture, there are little to no barriers for purchasing/accessing software either distributed or hosted on the web.  Put another way, the big win for many a product manufacturer in the past was to get distribution in Walmart.  That would guarantee you a large number of sales, just because so many customers would pass by your product as they shopped.

No such advantage really existed on the web.  Oh, it existed for promotion: the value of being slashdotted or techcrunched was huge for getting the word out.  But it didn't exist for placement; you don't make it big simply because you're available for download both at and, on top of your own website.  Mindshare was always much more important than distribution channels in my mind.  Once people knew about you, if you were worth using or buying, people would come (especially in the techie/geek demographic, which comprised most of the market on the web anyway for a huge number of years).  Products were able to compete on merit and didn't need to rely so much on placement strategies as did physical products (but they still obviously required highly intelligent product, price, and promotion strategies).  I remember downloading every updated version of Netscape Navigator because I preferred it for the longest time over Internet Explorer.  They had over 90% market share for a reason.

But then something happened.  Internet Explorer got better.  I started getting interested around Internet Explorer 4.0, but only really jumped on board at Internet Explorer 5.  Coincidentally, Microsoft at the same time had been bundling Internet Explorer with Windows for a while.  This was the core of the antitrust investigation and DOJ lawsuit against Microsoft back in 2000.  David Boies played a starring role in showing that Microsoft had abused its monopoly power by bundling Internet Explorer with Windows to run Netscape into the ground.  Boies was masterful (check out Breaking Windows: How Bill Gates Fumbled the Future of Microsoft for a really interesting account of the whole philosophical struggle inside Microsoft), but I always did think that the ruling was a load of crock.  In my opinion, Internet Explorer had just simply caught up to Netscape, and Netscape had never figured out a way to make good revenue with its products.  There was no reason to download Netscape anymore, and even if Internet Explorer hadn't been bundled with Windows, a lot of people would probably still have chosen to go with Internet Explorer anyway.  I'd always conceded that bundling was probably enough to allow Microsoft to gain market share, but not enough to become the market leader.  Internet Explorer was simply getting to be pretty good and Netscape was starting to lag.

So even after the the DOJ antitrust win against Microsoft, I never really believed in the significance of placement strategies for finding that winning edge in web-distributed software.  Maybe I do now.

For my latest project, my friend and I are using Google Docs for all the documentation.  You may be surprised to note this isn't a discussion of comparing Google Docs with Microsoft Word.  Nope.  Here, I want to compare Google Docs with Zoho Writer.  Just the word processors, since that's what we've been using the most.  I remember when I first signed up for Zoho Writer to check it out.  It was awesome.  It seemed like it gave me almost all of the functionality of Microsoft Word, but online in the cloud, and for free.  I was of the firm belief that it would become my main word processor, based on the sole thought that merit is what counts for creating mindshare and thus usage.  Google Docs paled in comparison, both in terms of features and user interface.

Yet, I can't remember the last time I've logged into Zoho.  Every major collaboration document (and even independent documents) I've created in the past couple of years, I've made using Google Docs.  It only just occurred to me.  Despite the fact that I consider Zoho functionally and aesthetically superior, I'm using Google Docs exclusively.  Why is that?

I can only conclude that it's because Google Docs is so easy to access.  My gmail is open all the time (gmail is the new Outlook, huh?), so Google Docs is always just a click away.  It's just so much easier than opening a new tab, going to Zoho's website, and logging in.  With Google Docs, I'm already logged in and can get to any document in a flash.  Plus, the collaboration capabilities are dead easy when other people also have gmail accounts.  And if my collaborators have the same lethargic bent, maybe the mindshare effect is actually exponential.

Realizing my actual behaviour, as compared to my thoughts and intents, I've been forced to rethink my thoughts on the value of placement strategies in web-distributed (and now web-hosted) software.  Maybe placement strategy matters after all.  Maybe all those people stopped using Netscape truly because Internet Explorer was bundled, not because it became better (in all honesty, it was probably a little of both).  Maybe even I was in that category and was just deluding myself.  I don't know.

I do know that I continue to use Google Docs over Zoho Writer (and definitely over Microsoft Word), despite the poorer functionality in Google Docs.  It's simply good enough, even though there are some deficiencies I'm unhappy about.  And it beats having to open a new tab, go to a new website, and log into a new system just to access a document.

And for the record, my favourite web browser right now is Chrome.  Makes me wonder how Opera's survived as long as it has.  Will mobile continue to be their sugar daddy, or is webkit destined to take over that world as well?

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