With the mapping snafu, Apple may have made a grave mistake is regarding its customers are a resource to be exploited, rather than paying end-users.
Usually when it's time to talk about Apple, we're regaled with tales of fabulous products, exceptional execution, and a well-honed strategy. Couple that with a hyperactive press following the company, and it seems that every move made by Cupertino's finest is either the stuff of legends, or a strategic error exceeding Napoleon's Waterloo. The recent brouhaha surrounding Apple's Maps application is no exception. If you haven't been following the torrid tale, in its most recent mobile operating system, iOS 6, Apple abandoned Google's mapping product for an in-house rendition. It was announced with the usual flair and assorted superlatives, but execution left something to be desired when compared to Google's mapping product. Streets were missing, parks were mislabeled as airfields, and the navigation component would suggest an occasional swim through a major river.
Challenging an incumbent product that's had nearly a decade to perfect its offering is no small task. The resources and risk required were relatively obvious, and perhaps from an "ivory tower" strategic perspective, reasonably sensible. For years we've been hearing about how location-centric advertising and customer data are the future, a seemingly logical conclusion. If you know where your customers live, shop, travel, and visit, you are obviously well-positioned to tailor advertising to them, therefore control of mapping means control of additional revenue.
Where Apple may have made a grave mistake is regarding its customers are a resource to be exploited, rather than paying end-user.s Switching a core component of a mobile device to an untried, new chunk of code looks great in terms of mining customer data, but looks far less exciting when those same customers are alienated and frustrated.
While it's unlikely Apple has committed an irrecoverable error, IT leaders with far fewer resources than the world's most valuable company frequently do the same, and can learn from Apple's misstep. The old bromide that "the customer is always right" is rarely true, but at the same time, customers should be regarded as a source of revenue and a valuable resource, rather than an inconvenience or entity that exists solely for exploitation.
The big question
For many in IT, that begs the question: "who is my customer?" We've traditionally talked about internal customers, who might be end-users ringing the help desk, or a business-line VP requesting a new project. In a purely shared-service style IT organization, this may be an appropriate perspective, but as IT becomes more deeply embedded in functional areas, IT's customer is shifting from internal personnel, to true, external customers who write the checks that keep your organization operating.
This is an easy concept to discuss and a seemingly obvious proposition, but on the question of mapping, Apple apparently made a strategic decision that its customer was not the person throwing their $299 on the counter at the Apple store, but advertisers and internal databases.
Even within the same industry, two companies with similar products might have different customers. Google has made no secret of the fact that most of its products are designed to sell advertising. While a product like gmail or the Android mobile OS has many user-friendly features, it is fundamentally designed to allow Google to sell ads. Apple has long claimed end-users as its customers, and pitched its products as having superior features for this market. When this message gets confused, as has occurred with Apple Maps, bad things can happen to good companies.
For CIOs as well, miscalculating who your customer is can have grave repercussions. If your customers are internal employees, alienating them through convoluted charge-back schemes, or draconian security policies is a recipe for failure. If your customers are of the external, cash-in-hand variety, jumping after every budgeted and technically-exciting IT project could create distractions that cause you to lose sight of true revenue opportunities.
Just as Apple has quickly weathered past errors, it will likely move on from its mapping woes. The average IT leader however, might not get another chance.