My largest competitor is imploding - why am I not happy?

I woke yesterday morning to the news that our largest competitor has announced that it is laying off 15% of it’s workforce.  News continued leaking out throughout the day of “meltdown”, sinking ships” and “panic”. This should be great news – right? No – that is a lot of people facing Christmas without a job and anyone that has gone through it (including me) would not wish it on their worst enemy.

Two years ago we typically lost 70% of the opportunities we competed with this company on. They were feted by Microsoft and spent huge amounts on marketing that we simply did not have. Wins against them were sweet, we had won as the new kids on the block against the established industry leader. They kept winning business awards and seemed to be unstoppable. I must admit their marketing dollars did help raise the importance of professional migration to the cloud. I always respect good competitors and tried to connect to their CEO but my invitation was not accepted – they were riding high, why talk to competitors and potentially do something world changing?

Last year they secured a large injection of venture capital funding. The first signs that something was going wrong was when a few key product people left the company at a critical stage of their development process, always a red flag. Then we started to hear from disgruntled partners that they had launched a managed service platform and were forcing everyone to sign up to a recurring revenue model instead of being able to simply pay for a one-off migration.  As the months went on we were delighted to pick up market share throughout the World as this strategic mistake led to huge disillusionment in the market. Soon we were winning 70% of the opportunities where we pitched against them.

In the last two months we have seen aggressive pricing from this company in key markets, desperately trying to buy back lost market share. We run a tight ship and keep costs under control so have been able to weather this disruption but they have obviously had to take more drastic action. So I should be psyched, punching the air or at least sitting here with a smile on my face, but I’m not, I can’t help thinking:

•    About the poor hardworking employees laid off before Christmas;
•  About how quickly a strategic mistake can wreck a good company;
• About all those lost “market awareness” marketing dollars!

But most of all I find myself slightly sad, I believe that genuine competition helps us all. It keeps us on our toes, pushes us to do better and benefits the entire market.

It is easy to look back on successes, attribute them to our genius and believe that we can do no wrong. The truth is that we are all just one major strategic mistake away from failure and that the moment we stop offering our customers what they want because we think we know better is the moment we risk losing it all. 

I hope this company can survive, look past short-term price cutting and re-emerge as a great competitor, it will push us to strive ever harder to meet and exceed our customer expectations. All I can do is watch, promise our customers that we will continue to listen to them and continue to develop our products based on their feedback.