Verizon announced it lost last quarter over 100,000 mobile phone subscribers to aggressive pricing from Sprint and T-Mobile. No matter – it is not about to start discounting. Instead, it has ramped up an aggressive ad campaign about how it has the most “reliable” network. The ad usually ends with whoever is not on Verizon in some less than pleasant situation.
Google introduced yesterday a wireless service (Project Fi). In many ways, it is promising reliability by leveraging over a million hotspots and excess 4G capacity from Sprint and T-Mobile - not relying on a single point of failure. And it promises price points and plan flexibility which would make Verizon cry.
Except that Verizon will not cry, it will scoff at the Google concept. It will say Google is a bit player (even with its previous successes with Voice and increasing Fiber footprint). It will dismiss the fact that UPS has for years now equipped its drivers with network swapping capabilities, Apple has a SIM card which allows users to do the same.
This is ingrained in the Verizon culture – we have been customers for over 30 years and have seen this play out in home service, global long distance, calling card, DSL and just about every service they offer and they keep losing that business. You see Verizon refuses to accept connectivity is a utility, not a luxury, and that for most consumers good enough is well, good enough.
In the enterprise software world, many on-premise vendors behave like Verizon. They scoff at half off maintenance Rimini can provide (and with better customer service). They refuse to acknowledge that a Workday or NetSuite can deliver a function point at a fraction of the cost their bloated partners charge.
For years, SAP ran its version of “reliable network” with its “Run Better” ad campaign. With its next-gen S4 it will emphasize speed and run campaigns about “simple”, without showing it is actually collapsing the $ 200 bn a year ecosystem around it. The concept of “good enough” for back office functionality seems foreign to it. That journal entries and purchase orders are utility, not luxury, for most companies. Ditto with IBM when it comes to data center services. AT&T when it comes to MPLS circuits. And on and on.
Don’t blame them, blame the enterprise buyers. As consumers, we reward luxury brands with single-digit market shares. We love to splurge occasionally on a weekend at the Four Seasons, but “make do” at Hiltons and Holiday Inns most of the time. We may have a Tesla in the family, but we balance it out with Toyotas and Fords.
In the enterprise world, many of the luxury brands have 10-15-25% market share. No wonder, disruptive offerings often come from the consumer tech world from players like Google, Box and Amazon. They are usually much more aware that their “good enough” is actually pretty damn good.
