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The Nightmare Scenario

  It was a chilly, grey, drizzly April morning. Whenever the weather was like that, and it was usually like that near Seattle, the ascetic wunderkind of the software industry was filled with nervous energy. ``Damn,'' he said, looking out the window, ``what I need is more money.''

He looked at the most recent ranking of top-ten software companies, noting with satisfaction not only the extent of his lead in the number one slot, but that it was widening, and gazed further down the list seeming, for a moment, almost like a lion scanning a herd of antelope from a distance, weighing vulnerability against size.

``Excel's got them on the run,'' he muttered, looking at the faltering growth and eroding margins of a former darling of the software industry. ``Hrmpfff...databases. Wait'll they see our....'' His eyes continued down the page.

``Now that's interesting,'' he said, turning his mind in a direction he hadn't thought much about before. ``Two hundred million plus sales, 24% after tax, 60% market share, no mass distribution, and they don't even have a product on Windows.''

By the time he left the office that evening, the outline of the plan was complete. Implementation began within days. Once he'd realised that this not only had the potential to become the next spreadsheet from a revenue standpoint, but could be the keystone of his larger strategy to move the windowing system and portable operating system into the workstation market, and was, in addition, the largest remaining software market his company hadn't plucked from its pioneer, he gave the project the highest priority.

First, he appointed a strong project manager who'd proven himself on another mainstream application. He delegated total authority to this person to get the job done and gave him discretionary authority over a generous budget and the go-ahead to recruit a project team from anywhere in the company. That person chartered an in-depth study of the market, the users, the target company and its products, and the existing distribution channels. Quickly the plans were drawn.

While negotiations were underway to acquire those technological components of the product more expeditiously bought than implemented in-house, a core team of 75 developers was assembled. At the same time, quality assurance, marketing, sales, and other departments began to assemble the cadres they would need as the product came to require their attention. What with the rapid growth of the existing products even during a recession, resources were tight and many of the jobs were filled by new hires. The staffing up worried the financial planners, but when shown a demonstrated market of more than two hundred million dollars a year waiting to be grabbed, they signed off on all the requisitions.

By July, the central graphics engine had been acquired and was being extended from 2D into a 3D user interface. Some of the developers were particularly amused when they adapted several ideas for object pointing and orientation in 3D from presentations made at a conference by members of a research project at the target company. Down the hall, the surface and solid modeling code that had been acquired was being hammered into shape and prepared for linkage to the user interface.

Once the outline of the product was clear, another 25 people were added to the project. This group was dubbed the ``compatibility team,'' and immediately set to work developing translators to read and write the databases of the target product, those of its principal competitors, plus the government-mandated interchange standard, awful as it was. Most of the other translators were already in-house, components of the spreadsheet, word processor, or presentation graphics products and needed only to be adapted to the engineering product.

When you do things on this scale, it's hard to keep what you're doing under wraps. But that needn't be a disadvantage. A prototype of the product was shown as part of an industry briefing on the company's strategy for the CAD market. The product was rolled out in Detroit, overlooking the heart of the US engineering and manufacturing plant. The analysts anticipated the outlines of the announcement but were stunned by the details.


Company officials announced plans to introduce finite element analysis, numerical control machine programming, and other engineering modules over the next several years. ``The personal computer has brought a new era of productivity to business, and now it's time to do the same for design, engineering, and manufacturing. Next January, we'll deliver a product that everybody can afford and anybody can learn to use; the first CAD product to break down the barriers between the front office, the design studio, and the factory floor by sharing a common user interface, hardware and software environment, and file formats,'' said the founder, closing the presentation. As he rode down in the elevator he said privately to the project leader, ``That should give 'em something to chew on in Sausalito, don't you think?''

Autodesk's stock fell 25% the next day, and although it recovered half the loss over the next several weeks, the attention of management was consumed for much of the next month in talking to analysts, institutional shareholders, dealers, developers, and key corporate clients. In addition, there were depositions to be taken and documents to be produced in conjunction with the two shareholder suits filed days after the announcement. Product development schedules were advanced, low-priority projects were terminated and staff shuffled around. A crash project was set into motion for a promotional campaign built around the ``world standard'' theme. But somehow it didn't seem to matter any more.

Windows Engineer was featured in a two minute spot in the Superbowl next January, the game where, ironically, San Francisco lost in the last minute. Shipments commenced the following Monday, the same day the six page insert ran in the Wall Street Journal and the ad campaign broke in the magazines. The database-compatible Macintosh version was introduced the following July.

Within a year, their market share exceeded 50%.

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Next: Marginalia Up: Information Letter 14 Previous: Challenges and Challenger

Editor: John Walker