Expert Speak

Unfair Ways of Locking in Customers by Technology

Unfair Ways

Reminiscent of the famous one-liner �Lock Kiya Jaye� from Amitabh Bachchan in the TV show, �Kaun Banega Krorepati�, some technology segments see companies trying to lock in customers using proprietary technologies. The printing industry, a dominant industry today and where the stakes are quite high, is an example.

p____p One would have expected the dust to settle down and every practice to be standard in what should be a mature industry by now. However, this is far from so.

p____p The channel is unhappy that the cartridges remain the major expense. They opine that the current pricing policies mean that while actual printer costs may sometimes be ridiculously low, the actual running expense of printers will be high because of the relatively higher costs of the �original� cartridges compatible with the printers. This means that the channel�s margins remain slim on the sale of a printer.

p____p It is also debatable if some companies actually under sell the printers, hoping to make up in the operational lifetime of the printers through compatible printer supplies.

p____p The other related concern is the lack of standard technologies across companies. While �A� printer company uses a particular technology in its printers, �B� company may use another. So the customer is stuck with �A� or �B� because if he has bought printer from �A�, he may not be able to get a compatible cartridge from �B� because �A� has locked out that possibility.

p____p It has been the strategy of companies, across industries and usually the leaders to try and lock in customers using proprietary technologies. So the case in the printing industry is not unique.

p____p Many say that it is better to get those products, where one is not tied in to proprietary technologies and monopolistic practices. After all, haven�t some of the top companies been pushing the Linux and open source computing with determination? The increasing triumphs of Linux should be enough to suggest that technology companies can no longer afford these kinds of strategies because customers and the channel cannot be happy with these.

p____p Companies need to understand the real concerns of its resellers and customers for long-term sustenance. Collaborative and standards are the need of the hour, especially to build customer confidence. Who knows, perhaps open source technologies across all products could very much define the future, ala Linux distribution.

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