strategery in the software business

related to Microsoft envy, is the fixation by many strategists in the software business on emulating the tactics Microsoft used on its climb to the top.

The biggest fixation is on creating lock in — getting a customer committed to your product by packaging a feature in such a way that switching to a competitors product would entail paying some substantial cost, e.g. by exposing a unique/desirable feature via a proprietary API; by making it easy to get your data in but hard to get it out; etc. In principal, there’s nothing wrong with this; it can generate sustainable competitive advantages.

Where most companies seem to go wrong is in (1) underestimating the degree to which customers are sensitive to switching costs; (2) by going out of their way to increase the switching costs unnecessarily. This particularly true in areas where customers have a fair bit of experience buying, e.g. the enterprise software business, where buyers often have a decade or more of experience working with software vendors. In their pursuit of strategic sustainability, they blunt the competitive advantage of the feature.

Which would you rather have: a feature with weak but sustainable competitive advantage? or a feature with strong but unsustainable competitive advantage?

My personal opinion is that, in most cases, you’d rather have strong competitive advantage. You should focus on generating advantages and let the sustainability of the advantage sort itself out. All you get from sustainability is complacency.