John has seen the future, and it’s a roach motel.
It is no wonder, that about the remote Borders of it there are produced both Men and Beasts of monstrous Shapes, considering the Agility of the Fiery Heat to frame Bodies and carve them into strange Shapes. -Pliny the Elder
Mark Benioff says Oracle is building the wrong software for the cloud era.
Well, the CEO of Salesforce.com would say something like that, wouldn’t he? A former Oracle executive, now in fierce competition with his former boss. Then, too, it’s always fun to battle with Larry.
“Being made fun of by Larry Ellison... is, for me, the highest honor there is,” tweets James Lindenbaum of Heroku.
Still, maybe Benioff has a point. Oracle does seem to be lacking a certain agility. A 21st Century corporation has to be light on its feet.
I’m too Agile for My Shirt
I’m sure you’re asking yourself, “What major companies does John think are among the light-footed? Who does he see making agile moves that you wouldn’t expect from a large company?” Well, I can think of a few companies that are pretty agitated.
There’s Netflix. They start charging for something they had been offering for free and the world and its dog naturally sees this as a huge price increase. They spin off the original core of their business using a name that has porn connotations and are forced to recant on that within days. The CEO finds himself posting more or less daily to his apology blog. Well, backpedaling frantically on unpopular changes is one kind of agility. Netflix is darting here and there and back again, moving like a border collie, shedding customers like an akita. And this quick-footedness is effective—in that it is having the effect of driving customers to competitor Redbox.
In related news from the Bizarro world, Redbox just raised it prices and is still gaining customers. Because agility has nothing to do with consistency.
HP is also showing some impressive agility for an old, tired horse.
“We’re buying WebOS. We’re selling WebOS. We’re shutting down the PC division. We’re keeping the PC division.” Now that’s flexibility.
I’m still not clear on WebOS. Is it on the way out? But if you know, don’t tell me, tell Meg Whitman. She’d really appreciate a clue as to what the company’s doing.
How agile is HP? HP is so agile that developers are bailing out to go to Nokia. Does Nokia even develop software? Didn’t they outsource that to Microsoft?
Nokia is a company whose latest moves display all the style and coherence of a captcha text. I’ve given up on trying to track those crazy Finns. They’re now the 27th most respected brand—in Finland. Nokia’s doing its agile best to wiggle right out of its corporate shirt.
Their shirt-losing gyrations are nicely in sync with the smart phone service provider market, which is moving with such agility that iPhone contracts have already worked down the food chain to a couple of guys in Mississippi with two tin cans and a string.
And then, off on a cloud of its own puffery, is Google. Surely Google is the axis of agile. They invented the concept Never Out Of Beta, and made being a Labs guinea pig trendy. They redefine evil as good: peer-to-peer, which we’ve been taught is evil, is good if Google’s doing it, because Google can do no evil.
Google reinvents its product mix so much that columnists get paid to explain how to move your stuff from one Google social media platform to another Google social media platform.
Unnoticed is the fact that Google has agiled itself out of being the go-to tool for search—at least if the search is for current news. When you were trying to get up to speed on the Gaddafi story, you turned to Twitter, you didn’t go to Google, right? I did get this from Google: Gaddafi became a statistic on World Statistics Day. But that’s kind of tasteless, I imagine a person with taste would say. Of course if you don’t know how to spell Gaddafi, and who does, you might have been better served by Siri.
So I think I know what Benioff means about Oracle. They’re still stuck in a product mindset. It’s oldschool to create a product, watch demand ramp up to some plateau, then know that all you can do is rev the product to keep it barely alive or start the process over with a new product, hunting for new customers. Every new product is DOA, a zombie at birth. Like all of us. As Dylan said, “he not busy being born is busy dying.”
I Have Seen the Future, and It’s a Roach Motel
But while products are born to die, markets can live forever. Customers are easier to keep than to get, and the surest way to keep them is to lock the doors once they’re inside. So the preferable business model is a roach motel. Or, to put it more attractively, Hotel California. Either way, they can check in but they can’t check out.
You start with planned obsolescence: design in the need to upgrade or replace. That’s worked pretty well for Apple. But that still gives the customers a chance to leave.
The next level of Hotel Californication is that you get those customers to become subscribers. That’s the secret to SaaS (I’d say to Salesforce.com, but I don’t want Benioff on my case): opt-out markets. They pay you by default; if they want to quit, eh, you’ll talk about it.
The ultimate goal is to get them hooked for life and turn them into a revenue stream. That’s nirvana, where the revenue cycles turn into a continuum, a flow. And then it’s really you as much as the customer who is hooked, living in the junkie’s dream of a permanent connection, a steady drip of the good stuff.
There’s your 21st Century business model. Mutual addiction.
John Shade was born under a cloud in Montreux, Switzerland, in 1962. Subsequent internment in a series of obscure institutions of ostensibly higher learning did nothing to brighten his outlook. This column was made on equipment shared with milk, peanuts, tree nuts, and a cat. Send the author your feedback or discuss the article in the magazine forum.