Structure of the Software Industry (by )

Much vehement ranting has been written about Microsoft's anti-competitive activities.

And many have ranted back that the capitalist system is based around companies competing as hard as they can; survival of the fittest then ensuring that the most efficient competitor wins.

Personally, I think that this interpretation of capitalism is overly fundamentalist... the capitalist system's design goal is to create a better society, and it is my opinion that this only happens if companies compete on creating a better product for less money. Not on competing through marketing, industrial espionage, forcing competitors out of business by using your cash reserves to give away a clone of their product for free, etc.

Marketing is a particular sore point for me. I work for a marketing software company, and the resulting exposure to the marketing departments of clients has led me to believe that marketing people are often somewhat... unethical.

After all, it would be better for society if a company spent money on improving its product than on marketing. Marketing does not make the product better. In fact, in an ideal capitalist system, people would buy the best products for the price - what use would there be for marketing to try to persuade them to do otherwise? Consumer purchasing seems to be much more strongly decided by marketing than by the actual quality of the product, pressing companies to rush crap products to market so they can start spending money on marketing them against competitors.

I've found only one use for marketing and advertising that I approve of - when a totally new product appears on the market, for example a jetpack, people would need to know about it to bother going and looking up all the jetpack manufacturers offering products to decide which is best. Otherwise, new products would only catch on slowly.

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  • By Charlee, Fri 7th Oct 2005 @ 5:26 pm

    I agree. I don't like marketing, because I can't afford to do it for my business. We used to get customers on word of mouth. But thanks to a) marketing of PC World as actually being quality etc, and b) Government training schemes, we don't seem to get customers anymore. Who cares whether we are any good or not? We don't have a chain of stores, we don't have flashy marketing, and we're honest. So we're buggered.

  • By Alex B, Fri 7th Oct 2005 @ 10:09 pm

    What have you to say about the "best product" being a per-person metric? AOL's marketing emphasises online safety, BT's emphasises a particular feature (music downloading), Bulldog's emphasises speed. Yes, BT allude to high speed and you and I know that's laughable, but for their target market, their message is right. There are almost no companies whose message is not right; the guys who got it wrong went out of business.

  • By Alaric Snell-Pym, Sat 8th Oct 2005 @ 8:42 pm

    Indeed, there is no global best product in a market, just a best product for each purchaser - although that does depend on the market; see Natural Monopoly.

    And yes, I feel that one of the big problems with a marketing-led economy is that it becomes harder and harder for the little companies to get a foothold. Nobody ever got fired for buying IBM, as they say - but that's not a good way to choose a multi-million pound mainframe that will be the core of your business.

    In some markets, the "We are a friendly little local company" angle works - like in Stroud near us, there are a lot of local handicrafts, farmer's markets, and so on. But that doesn't go very far in the cynical world of business to business commerce, and only seems to appeal to a certain proportion of consumers.

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