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"In IT, Sell
the Shave, Not the Razor", by Isaac Cheifetz, Minneapolis
Star Tribune, December 13, 2004
Is information technology an industry on the decline? It is now
nearly five years since the dot-com bubble imploded in April 2000.
Month by month, the future of the software industry becomes
clearer.
Will there still be a software industry as we knew it? It's
easy to forget that independent software corporations were rare
until the release of the IBM PC in 1981. Previously, software
generally was distributed free to corporations buying mainframe or
mid-range computer hardware. Individual businesspeople did not buy
software, and consumer computers did not exist aside from hobbyist
kits.
In some ways, the progress of the past 50 years in IT
corresponds to the history of shaving, both technologically and
socially.
Men have been shaving with sharpened flint since prehistoric
times and with long-handled metal razors since ancient Greece and
Rome. But the danger of accidentally cutting one's throat was
real. Until the 20th century, rich men hired professional barbers
to shave them daily -- working men were more likely to trim their
beards themselves or shave on special occasions.
With the rise of the office workforce in the late 19th century
grew the desire for a safe, affordable shave. The safety razor,
with its narrow strip of exposed blade, had been invented in 1762.
But this blade, like the long-handled straight razor, required
sharpening.
King Gillette conceived of the disposable safety razor in 1895,
patented it in 1901 and took it to market in 1903. Gillette's
safety-razor system soon was selling millions annually.
Gillette's brilliance was the concept that launched a thousand
business school cases: "Sell the shave, not the blade.” To
make his innovation accessible to a mass market, he priced the
razor artificially low, making it affordable for any worker
wishing to appear professional.
It was the lifetime purchase of custom, disposable blades, for
pennies each, that guaranteed Gillette a long stream of profits.
His business model is considered a classic for its simple
brilliance in launching a technology to a mass market and
embedding planned obsolescence into a product life cycle.
The history of information technology has several interesting
parallels with that of shaving:
| Technology
Stage |
Information
Technology Era |
Shaving
Era |
| Primitive |
Era
of Single Purpose Computing (1945 to 1964)
Computers
were special-purpose machines, generally programmed for a
single key task.
|
Pre-industrial
–
Razors
were handmade by craftsmen, using flint, iron or bronze. |
| Specialized |
Golden
Age of Mainframes (1964 – 1981)
In
1964, IBM released the System 360, the first computer
product line with a consistent, scalable architecture. The
360 made computers accessible to more corporations, but it
was generally large companies who leased (rather than
bought) them, and they were programmed and maintained by a
priestly caste of specialists.
|
Industrial
Revolution
Long-handled
open razors were widely available, but danger of cutting
ones throat limited use to professional barbers, the very
brave and the very coordinated.
|
| Mass
Revolution |
Golden
Age of Software
(1981 –
2000)
As
companies put a PC on every desktop, IT hardware and software
vendors became a major sector of the economy. But by the early
90’s PC’s were a commodity, and by the 90’s so was
software. The Dotcom bubble masked this long-term trend. |
20th
Century
Disposable
safety razor allows affordable, safe, professional shave for
all. Razors eventually become a commodity. |
| Commoditization |
21st
Century
In
the Internet era, customers are focused on buying business
services enabled through technology. The “Open Source”
movement of free software puts additional pressure on
technology vendors. |
21st
Century
The
premium manufacturers continue to innovate their products
and their brands. Their previous models are often copied by
low-end “open source” competitors. |
Of course,
comparisons between razor blades and information technology work
only to a point. Shaving is a discrete process with a beginning
and an end, while processing information is unbounded. Some
scientists consider the universe itself to be a massive
information-processing engine.
But from the standpoint of market adaptation, both processes
have gone from specialty item to mass market to emphasizing the
end result more than the tool; a closer shave, or a better-managed
business.
Shaving commercials for years have promised a closer, more
consistent, shaving experience -- or in Six Sigma terms, a lower
statistical variance in critical to quality attributes.
To paraphrase Peter Drucker, as the Internet continues to
become the platform on which business is transacted and products
delivered, the informational "shave" increasingly will
become more important than the technology "blade."
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