Ch 6: Business Lean & Simple

Because of low-cost alternatives, Microsoft, freeware, and other factors, sellers are experiencing intense pricing pressures. First, the information on Microsoft and its steady spread into the corporate account was new to me. The chapter states, “an accepted rule of thumb has been that Microsoft technology is the most appropriate for small workloads and companies, Unix for medium, and IBM mainframe for large”. At first, this rule seemed to be a threat to Microsoft limiting the size of the company that Microsoft could be used for, but since small businesses represent more than 99% of all employer firms, small companies are the majority. Therefore, Microsoft’s appropriate target market is already much greater than the market for Unix and IBM. In addition to this, the table from Gartner predicts that by 2007, which has already occurred, Microsoft’s operating system will become as good as those offered by Unix and IBM. I was curious if this prediction was true and found mixed results on whether the operating system offered by Microsoft in 2007 is comparable to those offered by Unix and IBM. The lower costs of Microsoft products has saved some companies millions, but on the other side, Robert Schindler, a mechanical engineer for various Fortune 100 companies, wrote, “I believe that Gates and his empire have done more to lower the standards of society than anything else in my lifetime. If my product had the same quality as theirs, airplanes would be falling out of the sky hourly.” I am still up in the air on this issue.
Next, I was aware of open-source software but am shocked at how many companies are adopting it, but with the great debts created by irrational spending patterns in the 90’s, freeware does seem like a logical approach to saving in IT costs. However, my personal experience with freeware proved that the best things in life aren’t always free. I downloaded a freeware program for editing photos, and after I installed the program, my laptop became infected with lots of spy ware. It slowed down my computer so much that I had to spend lots of money at Best Buy having them clean my entire hard drive. If I had read the instruction manual prior to downloading the freeware, I would have seen the recommended list of anti-spy ware programs to download before. Probably the cost of buying software for photo editing would be much less than the costs associated with the problems caused by the freeware. However, in the corporate setting, carefully implementing freeware can save the company millions. As the chapter points out, custom programming accounts for two-thirds of all software spending. With freeware, the source code is available for free which provides a great savings in cost for those companies seeking to build custom solutions from existing software. Internal customization does have costs, but for companies with IT departments capable of evaluating and managing such technologies, internal customization is preferred to the greater costs of external customization.