More on Customisation

Like I said in my last post, customisation is a fascinating subject when it comes to software. A couple of regular readers have both held forth on the subject (I hope more will follow otherwise this blog suffers from the same issues as Techmeme!! I know, ironic link). Ben Kepes appreciates the concept, recognises the value for non-competitive applications being consistent but holds to the view of customer centricity being infinity valuable. Ben does make the statement that.

doesn’t it start us down a slippery slope to mass-homogenization where there really is nothing different between one enterprise and another”

 Bob at Smoothspan thinks that this isn’t a mutually exclusive scenario. Some things can be commoditised and some things can't. Bob also states that taking things vanilla breaks the rule of IT adding value by not introducing change.

 
Here’s my two cents on it. According to
Michael Porter, there are basically 3 ways companies compete:

  1. They can build a differentiated “best” product in the market.
  2. They can serve a niche better than the “best” product leader.
  3. They can be the low cost provider.

If what I say is true, that a business can take code vanilla (BTW I actually agree with Bob this isn’t a universal truth) they will accrue savings. They will save on code, customisation and implementation. They can choose the low cost provider (by now you’ll see where this is going) they can in fact BE a low cost provider or use the EBITDA savings to invest in other things. These other things could be differentiation of their own product or building a niche channel.

Ben’s version of mash-ups plays to either a (1) differentiated best product but that would be quite expensive to do on a mass scale so it’s more likely to be (2) a niche play. Where’s Bob's example is more likely to be (1) mass differentiation. Simple customisation on a mass scale (sounds a lot like salesforce.com).

So where does this leave us on the debate? I think for consumers and producers of SaaS alike the answer is know your business and your business model, in particular know thy customer. When you do, you can pick any of the above plays to suite your scenario

 

 

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