Thursday, December 29, 2005


switching costs and usability

I recently groaned about how supposedly "open source" Firefox didn't really offer a vendor-neutral solution for storing bookmarks. Firefox forces users to rely on its own implementation of bookmarks, which is a usability negative. Firefox imposes a penalty for switching to another browser, making it difficult to export one's bookmarks, and try to hold their user base captive.

Firefox is using a "lock-in" ploy used by many vendors (Microsoft, Abobe, Macromedia, etc, etc). Economists refer to lock-in as a "switching cost." Switching costs are directed at two parties: at rival vendors, to make it more difficult for them to sell to your clients, and at one's own customers, to prevent them from defecting to a rival vendor. From a user perspective, switching costs diminish user choice and sovereignty and consequently the usability to perform activities independently of a specific vendor's solution.

Switching costs are a concrete example of how complete usability is not necessarily in the short term interests of a specific firm. Consider the broader issue of standards. On balance, standards benefit users, who can interact with data (numbers, images, whatever) without worrying about implementation idiosyncrasies. But market leaders or insurgents with a following consider standards a threat, since it has the potential to deflate their market share or market momentum. Standards market is easier for users to hop around between competing products, instead of being invested in one. While standards are good usability overall, they can have negative consequences for specific firms. Generally, dominant firms embrace standards only when their rivals have enough market share that it makes sense to say "We are the market leaders, but we pay well with any minnows you might also deal with."

Dominant firms are often half interested in the usability aspects of standards. If they are truly dominant, they would like user-recognized standards not to exist, but they can never be sure how complacent they can be. Often, firms are in limbo, using a half-standard, perhaps shared with other firms, but not truly universal, authoritatively endorsed by a leading standards body. In this case, they are concerned with user perceptions about the importance of standards. Do they stand to gain more market share by opening up the standards, or lose market share by doing so? If a small player in competitive market, a firm will be interested in promoting standards, which will reduce the costs of acquiring new customers.

Firms may abhor standards because they would appear to reduce one's own differentiation. The question is, does this differentiation matter to users, or is it just narcissism by the firm? Embracing standards generally reduces costs for a firm's product development, and so promotes cost leadership. Lower costs benefit firms and users alike.

When it comes to reporting how users experience switching costs, usability professionals are simply messengers. Companies may see danger or opportunity in the message, but that is for them to interpret.

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