It's all about lock-in
Every company wants what is called "account control". Very few companies will ever talk about this, but it is essential for investors to understand. You want to invest with companies that excel in this area because effective account control means maximum operating leverage and earnings. It's what makes gorillas, gorillas. Companies which really excel at account control include IBM (which practically invented the concept), MSFT, INTC, CSCO, SUNW, EMC, and ORCL (to name a few). Basically, you want to make your customer very, very dependent on your products and services and you want to delight them to such a degree that they wouldn't even think of looking at competitive offerings. It's part customer inertia, part salesmanship, and part product set. But put it all together correctly, and a company gets very "sticky" customers who stay with you year in and year out. |
