Poland is good example. Comparing to the rest of the world Polish economy is doing pretty well, the effect of financial crisis was here less painful for people and businesses than in other countries. The GDP growth for 2009 was 1,7%, the prediction for 2010 is 3,4%. Since 1989, when communism collapsed in the Eastern Europe, the Polish people have been working very hard and they have a lot of hope, faith and positive motivation to build a better future.
According to market data total software market in Poland was 1,5 bln USD. 80% of this value were delivered by 50 software vendors. Country with almost 40 million people, with more than 1 million small businesses, 40 thousands of large and medium enterprises. And 50 software vendors. How it is possible? (Is situation on other markets significantly different?)
To get better feeling why it is working this way is to look at software procurement from customer perspective. Customers learned how to purchase technology during last 20 years. In their current behavior we can read following assumptions:
a. technology is complicated and can be explained mainly using sophisticated language
b. technology is expensive because costs of development are significantly high
c. purchasing decisions are strategic - any mistake can lead to serious business problems
d. purchasing process has to be complicated (licensing, options, features, maintenance, service, support, upgrades, etc.) because technology is complicated
Just for hypothesis testing: if somebody doing purchasing job has in mind above assumptions then for sure he will purchase from big, traditional players:
a. only big players can send somebody who explain how complicated technology is and help to get proper purchasing arguments. And also they will deliver necessary education.
b. by default big players are selling big products
c. big products are designed to be critical, it is important part of their value.
d. big software products are designed to fulfill very special, individually defined needs so definition how they can be purchased is multiplication of potential needs and existing features
In this context two questions are interesting:
1. This is a fact, that people doing procurement learned mentioned assumptions and they are logical doing purchasing based on them. However, are these assumptions real, based on facts and truth? Do we imagine situation when somebody is purchasing innovative technology: name it using simple words, in inexpensive way, with less stress (if something goes wrong, we will fix it), doing simple transaction?
2. Is current, described situation stable, done forever?
Tuesday, March 16, 2010
Customer perspective - 50 vendors