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November/December 1999
Giving It Away For Free?



   This editorial website includes personal
   observations by Masa Eto on an array of topics,
   from world affairs to business. Mr. Eto is the
   international division director at A&D Company Ltd.
 
 

In the Internet world, establishing a one-to-one connection or a customer database faster than others is the name of the game. I discovered an interesting concept that is now common in the computer industry, yet is difficult for a hardware-oriented company to take advantage of. When you buy a PC, you will find a number of interesting software applications pre-installed, like car navigator, world map software or translation software. I assumed that PC manufacturers buy this software, maybe at a marginal cost from the software manufacturers, to make the PC more attractive to customers. When I asked a friend of mine who works in the PC industry what kind of price they would pay in such cases, he laughed at me as if I was crazy. He said, "It is just the opposite, a software company asks PC manufacturers to install their software. It is not free. A software company pays for it." I was so shocked to hear this. Naturally, the software company has the PC manufacturer install part of the software or demo version so the software spreads fast and becomes popular, then they will sell an upgrade later or establish the one-to-one connection with their users. What a paradigm shift!

If you look around the software area, you will find a lot of free stuff, let alone demo software you can down load from a home page. Some Internet providers have begun giving away PC's as if saying hardware is secondary so long as they get connected to users. Why are they giving so much away? Has the world turned into a merciful place? Nobody, including the founders, knew how to make money when two young students brought Yahoo into the world, yet they have become so successful that people have just begun following their strategy without worrying about where it all leads to. No way! The IT world is not that naive. The IT forerunners are quickly learning as they implement their ideas that a one-to-one connection is not that easy. Your fancy home page alone does not bring you any business. You are connected to the world but nobody except those who accidentally hit your home page bothers to read it. A home page does not do anything proactive to get your name or product out into the world. In the Internet world it is quickly becoming a reality that the gap between the leaders and the followers is far greater than it is in the hardware world. Think of Lotus 123. It has literally disappeared and been replaced by Excelィ. Who knows All Direct Books, 2MillionBooks, A1Books, Books? But when it comes to shopping books on the web, everyone knows Amazon.com. In the Internet world one super brand out-lives the rest. A super brand attracts customers and increases one-to-one connection everyday while the rest struggle to be just ahead of the crowd. So giving away is not expensive in terms of returns, but a necessity in the creation of a customer base in the Internet world.

Giving out WinCT free of charge or at a marginal cost was a big decision, requiring a lot of discussion at A&D; but in terms of the Internet world this has been the best decision we have made to move ahead of the competition. However, we are doing only half of what a software guy would do. That is, we should leverage this give-away to the creation of a direct communication channel with our users. Get customers to register their names and addresses through the Internet when they download it. If you are our distributor, you can do the same. Then you are connected to your customers on a one-to-one basis so you can visit your customers through the Internet from time to time as after sales activity, to promote your service capability or just say hello to remind you are there to support them all the time. If you can send your message or guidance to proper measurement or weighing, you have far better chances to lock out competition from your customers.

There is a lot of discussion regarding web branding in the business world these days, so I don't think you will find much new in my discussion. However, it is important to note that our WinCT will be a very powerful tool that, if aggressively marketed, gets us into what a software company would pay for. Our WinCT brings us closer to the one-to-one connection with an unlimited number of customers, because it is available to anyone and anyone who uses it appreciates its capabilities. What a mind provoking idea! I know a software guy would laugh at me and say, "Didn't you know this already?"

You may address any comments concerning this editorial by email to Mr. Eto

Index of Mr. Eto's other articles

 
 
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