As you know, "Inside The Tornado" divides the process a product category life-cycle into five phases:
The visionary phase – when a product is first developed and marketed to "visionaries" who value it for its novelty.
The chasm – when a product runs into problems because it is "incomplete."
The bowling alley –when a product is developed to achieve leadership in niche markets prior to wide-spread acceptance.
The tornado – when a product takes a market "by storm."
Main Street – market penetration is deepened and expanded after a product has become ubiquitous.
A company can be judged to be in one or more of these phases at any one time depending on where its product or products are in the lifecycle.
I think, with respect to clients for browsing the internet, Netscape is in the tornado and, with respect to servers, it is just emerging from the bowling alley into the tornado phase. The demand for client/browsers is growing exponentially, in line with the demand for internet and intranet access generally.
In a Tornado market, there are three kinds of actors:
A "gorrilla," who leads and controls the market, and derives a disproportionate share of the profits and economies of scale that the market has to offer.
One or more "monkeys," who try to take market share opportunisticly from the gorilla by selling clones of the gorilla’s market-leading product into the tornado .
One or more "chimps," who do not compete directly with the gorilla but who try to establish a beach head for their products during the tornado by using a bowling alley strategy to establish themselves as the market leaders in their market segments.
It is clear to me that Netscape is the "gorilla" of the client/browser market place. Netscape controls at least 75 percent of the client or browser market. Its product sets the standard against which others are compared. People are willing to pay a premium for its products.
I think Microsoft is the "monkey" in the client/browser market. Although Microsoft’s browser traces its ancestory directly back to Mosaic, its browser is essentially a clone of Netscape’s. The main selling point for its browsers is that they are low cost, in this case, free. Microsoft is not trying to dominate any one segment of the client market place, "bowling alley" style, but is simply trying opportunistically to take sales away from Netscape.
In my opinion, Microsoft’s strategy will fail if Microsoft’s intent is to become browser/client market leader through a frontal assault on Netscape. The book says that a monkey cannot evolve into a gorilla but that a monkey can evolve into a chimp. A chimp can then evolve into a gorilla. If Microsoft is trying to take over market leadership from Netscape through a frontal assault as appears to be the case, it is, in effect, trying to evolve from a monkey into a gorilla. Because its product marketing strategy is to give away the browser to all comers rather than to establish its superiority and market leadership on one or more segments, the strategy lacks focus and will fail. Netscape has won the "browser war" and will remain market leader, with Microsoft stealing away business on an opportunistic basis as best it is able. It is probably too late for Microsoft to become the "gorilla" of the browser/client market in the near term, because once it is possible to identify the "gorilla," it is too late for others to take the "gorilla’s" place.
I think Bill Gates knows this. I do not think his strategy is really to become the browser/client market leader, but merely to slow down the adoption of Netscape’s product by putting out Internet Explorer as a free alternative that windows users can adopt instead of Netscape. By slowing down the adoption of Netscape’s product, he can deprive Netscape of revenues and extend the life of his existing OS and application products. Bill wants to provide the internet access people want so they will stick with the Windows platform and have less incentive to look at and adopt alternatives like Netscape. In other words, Bill Gates’ browser/client marketing strategy is, by necessity, purely defensive. He’s lost the browser war, and he knows it.
If Bill Gates wanted to become a "chimp" in client/browsers from which he could later evolve into a market leading "gorilla," he would focus Microsoft’s energies on one market segment (such as small businesses, whose computers are not likely to be part of networks and who are therefore likely to want to stick with Microsoft’s client-based applications suites regardless of what happens to the networked market place) and concentrate on becoming best of breed and market leader for that segment and its specific applications. Having done that, he would be in a position to defend that segment during the tornado and, if he’s lucky, later set off another tornado in Microsoft’s favor after this one is over. He may intend to do this in the future. I do not see that he is doing this now. If I’ve missed something here, please post it.
One final note: I notice from an article in the L.A. Times this morning that Netscape has signed on to provide Navigator to Compuserve on a non-exclusive basis. Since Netscape already has signed up Prodigy and, according to this article, is about to sign AOL, it appears Netscape will sweep the online services 3-0. It is also interesting to note that, according to the article, Netscape will be receiving royalties from Compuserve. I wonder if Microsoft gets royalties from Compuserve. I do not know, but I suspect not. If it does not, to me, that would be another sign that Netscape is the gorilla in the browser/client market place.
Am I wrong about this?
What other products does Netscape have in the "visionary," "chasm," or "bowling alley" stages?
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