Google Arrogance Squared: The Company Killer

Rob Enderle

Back in the mid-90s, soon after I'd started as an analyst for the Giga Information Group (since acquired by Forrester), I wrote a paper on Microsoft arrogance and how it likely would lead to a set of decisions that would cripple the company. A few years later, Microsoft demonstrated this arrogance, first in its over-the-top defense against Netscape and particularly in the related trial. This resulted in billions of dollars in fines and a consent decree that the company only recently got out of.

Google, which often seems to have a death-wish-like goal of exceeding Microsoft in every historic mistake, recently penetrated the privacy settings of both Safari and Internet Explorer and this was after signing its own, much less restrictive, consent decree. Almost as if to say, "Compared to Microsoft, our consent decree is for weaklings and we want one that makes Microsoft's look lame!"

I first ran into arrogance at Siemens, then saw it at IBM, and, up until now, the worst was at Microsoft in the 90s. Arrogance is a company killer and it can be particularly painful for customers of the firm going through this growth, and sometimes recurring, phase.

My Clash with and the Pain of Arrogance

I mentioned that I first ran into this at Siemens and this was after that company had just acquired ROLM, the firm where I was working, from IBM. As the acquiring company, it set up a meeting with my group, competitive analysis, for a market briefing and then proceeded to call us all effing idiots (seriously) because we had no clue about the market.


The company argued that ISDN was clearly the next networking standard and that both Token Ring and Ethernet would soon be gone (we agreed with the first as single-vendor standards seldom survived). And it felt strongly that its telephone systems, which had as an advantage automated moves/adds/changes and had not been adapted to U.S. power systems, would sweep the market. It clearly didn't understand that ROLM made most of its money from moves/add/changes and that the cost and size of the transformer for its already expensive switches would be a problem. Before I left, the company ran a $1M monthly loss up to $5M, which was pretty impressive after it decided to stop arguing with my group and effectively put us out of a job.

Later at IBM, where I was operating for a time as a troubleshooter, I met with the head of marketing to question a policy of both presenting products that we had no intention of actually building to keep customers from buying competing offerings and for charging for software updates that were basically massive bug fixes. Oh and we'd also killed our Quality Control organization because engineering found it annoying. The VP put his arm around my shoulders, and said "Rob, what you don't understand is that here at IBM we sell air, folks have to pay whatever we charge." I argued that I thought they would likely figure this out and he was fired a few months after I left to become an external analyst.

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