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Sunday, July 25, 2004

Listen to your customers or risk losing them by GM's Tony Scott

Don't like your car? In the future, says General Motors's CTO Tony Scott, you'll just download a new one.Tony Scott has a simple message for people who make hardware and software: Listen to your customers or risk losing them. As both carrot and stick, General Motors's (GM) affable chief technology officer wields an annual IT budget of nearly $3 billion. It's that kind of spending power that led many to credit Scott with prompting the recent détente between Sun (SUNW) and Microsoft (MSFT).It's maturation, standardization, and commoditization. The industry is going through a transformation -- one the auto industry and railroads and other big industries have already been through. I'll make a car analogy. Imagine if GM shipped you a car that you had to assemble yourself, and mechanics had to come to your house just to put it together, and it had no warranty. I think somebody would come along pretty quickly and say, "We've got a better idea on how to make and sell cars."When you go to a gas station now, you can stick the nozzle into the gas tank and it works. But in the early days of the auto industry, there were 2,000 car companies, nothing was standardized, and demand far exceeded supply. In that early era, you could do whatever you wanted. The tech industry has by and large been in that same mode. But that's now changing.People in the Valley are terrified of the idea that Silicon Valley might turn into Detroit. In that scenario, innovation and growth slow, and margins look more like -- well, GM's margins. The whole culture here has been built on startups and innovation. A very interesting interview.

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