Where has the FUD gone?

A long time ago, the IT industry was subjected to FUD (Fear, Uncertainty, Doubt) advertising campaigns.

FUD was a marketing strategy used by IBM. When competitors announce a new product (or worse, a breakthrough product), IBM would announce a similar product, but only in broad terms. The idea was to encourage people to wait for IBM's product, thereby reducing sales of the competing product. (It also created hype for the IBM product.)

To be effective, a FUD announcement had to describe a future product. It created doubt and uncertainty, and fear of making a bad choice of technology.

I haven't seen a FUD announcement for a long time.

They were common when IBM was the dominant manufacturer for computing equipment. The FUD campaign may have ended shortly after the introduction of the PS/2 (itself a product with a FUD announcement) line of computers. The market rejected the PS/2's Micro Channel Architecture, and accepted Compaq's ISA (the old PC standard architecture) with its 80368 processors. (Although the market did adopt IBM's VGA display and 1.44 MB hard "floppy" disk as standards.)

Compaq didn't use FUD announcements to take the lead from IBM. It delivered products, and its announcements for those products were specific. The message was "our products have this technology and you can buy them today".

There is one company today which has something similar to FUD announcements. But they are different from the old-style FUD announcements of yesteryear.

That company is Apple.

Apple is the one company that announces future products. It does it in a number of ways, from its annual marketing events to its reliable product schedule. (Everyone knows that Apple releases new iPhones in September, for example.)

Apple's FUD campaign seems to be accidental. I don't think that Apple is playing the same game that IBM played in the 1980s. IBM made FUD announcements to deter people from buying products from other companies. Apple may be doing the same thing, but instead of affecting other companies, I think it is Apple itself that suffers from these announcements.

Apple announcing a new processor for its MacBook line doesn't deter people from buying Windows laptops. They need laptops, they have already chosen Windows (for whatever reason) and they are going to buy them. Very few people change their purchasing decision from Windows to a yet-to-be-defined MacBook.

But a lot of Apple users defer their purchases. Many Apple users, in the middle of planning an upgrade, put off their purchase until the new MacBook was released.

Trade publications advise people to defer the purchase of Mac Minis, based on Apple's announcements and regular product schedule.

This behavior is the same as IBM's FUD from thirty years ago -- but with the difference that the (unintentional) target is the company itself.

It may be that Apple is aware of customers deferring their purchases. Perhaps Apple wants that behavior. After all, if Apple withheld new product information until the release of the product, those who recently purchased the older version may feel betrayed by Apple. It may be that Apple is forgoing immediate revenue in exchange for customer goodwill.

I'm happy to live in a world without FUD announcements. The IT world with FUD has challenges for planning, and a constant fear of missing out on important technology. The current world is a much more relaxed place. (That may sound odd to technology managers, but believe me, today's world is much better than the older one.)

Microsoft loses ability to FUD

Something interesting happened in the recent few years, something that has gone unnoticed.

Microsoft has lost its ability to "FUD".

"FUD" is an acronym for "Fear, Uncertainty, and Doubt". It is a marketing technique, used (if not invented) by IBM in the mainframe era.

FUD can be used only by a large, established company. It is a bullying technique, in which the large company prevents customers from purchasing products or services from smaller competitors.

Here's how it works:

Step 1: Company A, the large established company, has a dominant position with some set of products or services.

Step 2: Company B, a smaller company, introduces a new product that changes the market. Perhaps it is a new product, one that uses a different paradigm from the existing products (which happen to be offered by Company A).

Step 3: Company A, perceiving Company B as a threat, talks with customers and claims to have a product or service that will perform the same functions as Company B's product. Company A tells the customer to wait for their product, and delay any purchase of Company B's product.

It's a neat arrangement. Company A can use their reputation to throttle the sales for Company B, simply by claiming to have a similar product. Of course, Company A's product will be compatible with the rest of Company A's product line, to which many customers are already committed. Company B loses potential sales, while customers wait for the offering from Company A.

Some may call it unfair. Perhaps it is. It allows a large company to keep market share, at the expense of small companies.

FUD works solely on reputation. A large company can use it, because they have a credible claim to deliver the promised product or services. A small company cannot use FUD; customers judge them only after they deliver.

IBM used this technique. Microsoft used this technique.

But Microsoft cannot use this technique today.

Legal challenges to Microsoft has forced them to use open formats for documents and spreadsheets. This allows competing products that can use the file from Microsoft products. New companies have introduced new products that do not compete with Microsoft, but exist in a different space (think "Facebook" and "Twitter"). Microsoft no longer dominates the market.

Customers can purchase products from Apple, Asus, and Samsung, and services from Amazon.com, Google, and even IBM. People and enterprises can purchase competing products for Microsoft Word and Microsoft Excel, without fear of incompatibility.

Customers have lost their fear of Microsoft. Now, Microsoft has to prove their worth to customers.