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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."

 

Read Articles - The Commerce Chain, Isaac's monthly column on Business and Technology Trends, in the Minneapolis Star Tribune.

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