customer-loyalty

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Disruptive innovations change our lives for the better. They expose longstanding needs and signal that there’s a solution at hand. Moreover, the solution involved usually is less expensive than the status quo. The lower-cost aspect makes adoption inevitable and therefore disruptive.

Document management is like that. Decades ago, many enterprises found that the cost of capturing documents as electronic images vastly improved on the cost of managing file cabinets. Labor and printing costs still make up a significant cost for some organizations, but in general, as document management becomes ubiquitous, businesses save a lot of money.

Disruptions don’t remain disruptive, though. They commoditize and become mainstream, and on the way they become less costly and even more ubiquitous than their inventors had expected.

Really successful disruptions follow this path to ubiquity without skipping a beat, but other times vendors try too hard to extract value from their old disruptions. This still works when customers are deeply invested or it’s hard to convert to the competition. The term “walled garden” was coined to describe such situations.

Walled Gardens Can Fail

In a walled garden, you might expect a vendor to monitor license use tightly, and to oppose commodity licensing options like site or corporate licenses. Some vendors have gone so far as to audit use within a client enterprise and to charge back for uses assumed but not necessarily verified.

These policies might work when a disruption is fresh and a vendor wants to penetrate an organization. Later, though, both the customer…