No, not an article about how board games are making a comeback during lockdown, but a brief look at something that was supposed to be consigned to history - business monopoly. This is also an update on an article I wrote last year, which you can find here - turns out even the digital space can be monopolised...
It wasn’t supposed to be like this. The thrust of so much legislation and tech innovation was designed to eliminate any risk of being fleeced by some sort of fat, unchallenged controller. Look a little closer, however, and things take a distinctly medieval turn. As governments have withdrawn from doing things (initially to pretend such liabilities didn’t exist on their balance sheet, but more latterly because they lack the competence), they have replaced operating with contracting: inevitably such contracts contain clauses to protect the supplier’s market, a bit like that offered to the Sheriff of Nottingham to farm taxes in the days of King John. A government monopoly is at least leavened by political accountability, a contractual one not so much.
It is, in many ways, a perfect world for a small number of clever men: why bother with the exhausting complexity and costs of stimulating strong client demand for your product by innovation and improvement, when that over-demand can come from a clever lawyer with a mandate to snuff out any attempts at competition. Thus we have the worst of all worlds: the service levels redolent of the worst of nationalised monopolies with the nasty inequalities and employment precariousness of the private sector.
But what about the much-heralded role that technology plays in the destruction of controlled markets? Surely competition is “just a click away”? Actually, monopolies can work in this environment too, driven not so much by government fiat as the glorious gift of complexity and the fear of being wrong. Let me explain.
Take Salesforce, in many ways the embodiment of the new way of doing things. Its strategy in the late nineties was to stay simple (“No Software”) and appeal over the heads of the IT bods, steeped as they were in the expensive shibboleths of the LAN, directly to marketing teams who only needed an internet connection and a credit card. It was a brilliant move - I became a client in 2002 and built an effective system with nothing more than a knowledge of our business, not a ninja degree in applied computing. Fast forward to 2020 and how it has changed. “No Software” Salesforce simplicity has given way to “whateverforce” in all sorts of flavours, bouncing between different software versions depending on how far down the stack you go. It has become really difficult to solve simple business problems. Why would they do this?
As much as disruptive simplicity suited them as insurgents, protective complexity is now what they need as incumbents. Salesforce operates an extraordinarily sophisticated training programme (“Trailhead”) which, on the face of it, is really altruistic. One consequence of it just so happens to be that converting a bunch of people inside a company from client data people to Salesforce qualified people means that whatever the question, the answer is Salesforce. And with the crushing unanimity of the product, so comes the screaming fear of considering anything else. No matter that most problems that Salesforce solves are pretty prosaic combinations of disparate datasets and variable processes, and that there are literally hundreds of really good alternatives at a fraction of the cost.
It turns out that emotion can run hotter than rational analysis - even when considering something as rational as software. And well done Salesforce for recognising this, it's not illegal to be reassuringly expensive by creating the next shibboleth. So Salesforce's premium is an insurance down payment against the risk of looking foolish, always an attractive trade given the down payment is company money, whereas the foolishness would be uncomfortably personal. How do you legislate for that?