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Technology Stocks : Gorilla Game
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To: Larry Abrams who wrote (128)4/25/1998 12:13:00 AM
From: Mike Buckley  Read Replies (1) of 387
 
Larry,

>> "winning" means establishing an open, yet proprietary
architecture which means that switching costs are extremely
high.<<

I think it's important to recognize that not all proprietary, open architectures have high switching costs. Only those that form a strong value chain enjoy the high switching costs.

I haven't analyzed the buildings controls market, but I suspect that there is no strong value chain in that industry. Each building controls contract is won one building at a time. There's no particular cost to the building owner to using different architectures in each of the buildings, an example of a relatively low cost of switching.

--Mike Buckley
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