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Stone Age tribes.

During last week's splashy Excel 3.0 launch, Microsoft showed a video vignette of a small finance office whose employees had just made the big leap from Lotus to Excel. One of the star performers was the office's controller, who boasted about how she'd achieved miracles of productivity with the help of Excel's collapsable outlining feature. Instead of manually deleting dozens of rows and columns of detail, she now hits a few keystrokes and zap! a skeleton view appears.

Of course, we might reasonably ask: Where has this woman been? For the past two years, Symantec has been selling a Lotus add-in called Budget Express that creates almost exactly the same collapsable outlines that dazzled Microsoft's Excel converts. Outlining is a nifty tool that we're happy to see become a core feature of Excel--but we still wonder why a hard-core Lotus user didn't seem to know about Symantec's add-in version of the same tool.

Well, part of the answer is that these Excel 3.0 converts weren't exactly state-of-the-art Lotus users. In fact, like one of those Stone Age tribes that occasionally emerges from the jungle, the controller and her co-workers were still using some pretty archaic software, including 2.0-vintage copies of Symphony and reportedly even a few copies of 1-2-3 Version 1A. Clearly, outlining wasn't the only spreadsheet technology that had passed these folks by.

Our point isn't that Microsoft rigged the comparison by finding untypical Lotus users. Just the opposite: We suspect this little band of retrograde spreadsheet users are a good deal more typical than the software industry likes to think. The truth is, vast numbers of PC users are absolutely indifferent to the issues that seem so absorbing to the computer industry. These users don't pore over each new issue of InfoWorld and PC Week, they don't spend Saturday afternoons browsing in Egghead, and they don't cluster around the water cooler chatting about database objects and font imaging engines. If a violent spreadsheet war erupts in 1991, we're pretty sure these users won't even notice.

In theory, that's good news for Lotus and for any other company with a massive installed base. Not even Microsoft can afford to pitch the wonders of Excel 3.0 to every isolated pocket of 1-2-3 users; there's simply no profit in the intense hand-holding and evangelism that such sales require unless you're filming a marketing video). But these stone agers don't do Lotus any good, either. They aren't loyal buyers of upgrades or aftermarket titles, and they certainly don't give a fig about networking, cross-platform compatibility, or the three-dimensional spreadsheet. The truth is, customers like these are as inaccessible to Lotus as they are to Microsoft.

Moreover, market inertia isn't a problem that's unique to spreadsheets. By now, the PC marketplace consists of at least 50 million users, a large percentage of whom are in no hurry to migrate to more advanced software and hardware, no matter how much effort and money developers invest in promoting new technologies. One way to get a sense of this inertia is to measure the impact of last year's windows 3.0 launch, widely regarded as the most successful software rollout ever. Even if we accept the wildly optimistic assumption that every copy of Windows shipped so far is now in active use, Windows 3.0 penetration still amounts to less than 4% of the total PC installed base. (The true number is probably closer to 1%.) Is this what the graphical revolution" is all about?

The comfortable answer is that eventually most stone agers will become "late adopters" of more advanced technologies. Maybe. But we read the market a bit differently. Our take is that the late adopters are moving so slowly that they'll never catch up with the rest of the parade; in fact, the gap between the front-runners and everyone else continues to widen. Thus, year by year, we accumulate a larger and weightier rear guard of customers who see no compelling reason to move on to newer products. (Unlike autos and even Maytag washing machines, word processors and spreadsheets never really wear out, so we can't count on a natural replacement cycle to clear the market of obsolete technology.)

This inertia of the installed base has important consequences for an industry driven by innovation. By locking companies into archaic standards, the growing numbers of Stone Age tribespeople increasingly limit the ability of developers to proliferate new technologies, to replace obsolete products, to reward important breakthroughs.

At the same time, the issue of inertia raises another question: Is the software marketplace as big as we think it is? When we weed out all the Stone Age tribes that aren't curious enough to explore new products, the market slims down pretty fast. Our guess is that most of the software industry currently lives off a relatively small, dynamic customer base of early adopters, at most five or ten million people. As for the rest of the 50 million PC users--they're a black hole, not a market.
COPYRIGHT 1991 Soft-letter
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:users' indifference to trends in the software industry
Date:Jan 17, 1991
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