Low-cost Airlines and Software
A look at what’s happening in the US airlines industry can give a foretaste of what could happen in the software industry. As you read the following excerpt from an NYT article (via IHT) on the future of air travel:
In many cases, the low-cost airlines created a new market: people who would never have flown because of high prices. During economic downturns, their niche expands because cash-strapped passengers used to flying full-service airlines, including business travelers, defect to them.
“What’s happened is that there is a market segment that values price over additional features,” said John Quelch, a professor of marketing at Harvard Business School who sits on the board of EasyJet, based in London. “The major airlines competed really by adding benefits over the years. Their proposition has been, ‘We have something more over what other guys are offering.’ The niche value airlines have been able to come under that pricing umbrella. They have identified consumers not interested in additional frills.”
Think of the niche markets in software as the small and medium enterprises in emerging markets. They don’t want the frills and cannot pay much. We need the equivalent of a Southwest for the enterprise software industry. That is what we at Emergic are hoping to do.