Public relations organizations and press offices are well versed in puff pieces, vacuous pronouncements regarding the products and services they hope to promote in the media. Often, the media sucks up such puff pieces, not only as fillers during lean times in the realm of hard news, but if a puff piece is sexy enough, it will spread virally regardless of any real lack of substance. We’ve all seen the sucker headlines announcing breakthroughs, the next big thing, celebrity endorsements, oddball events and the like.
The media relations officers in the computer industry are no less guilty than the likes of nutraceutical manufacturers, HDTV companies, and others, in blowing out such puff pieces. But, the computer industry, and specifically the software side of the business, has its own specialty version of the PR puff – vaporware!
We all know about software, freeware, and shareware, you may even have come across company names and products like netware and openware. Brains are often talked about as wetware, as opposed to there being hardware, and everyone these days dreads malware. But, vaporware?
Writing in the International Journal of Technology Marketing (2008, 3, 116-136), marketing professor Yongchuan Bao, of the College of Business and Economics at California State University in Fullerton, quotes a definition of vaporware as:
A marketing strategy in which a firm pre-announces the delivery date of a new product but intentionally fails to deliver the product on the promised date.
The term vaporware was originally coined by a Microsoft engineer in 1982 to describe a software project that had run out of steam, but this definition has been superseded by the definition of a non-delivery on a pre-announcement.
Now, why would a software manufacture peddle vaporware? It is so obviously a misleading marketing strategy that is liable to generate a lot of media interest for a product, generate anticipation among consumers but ultimately disappoint when the company fails to deliver on the given date. It’s like getting prepared for Christmas early in December only to learn on the 24th that the Big Day has been put back to February 17!
The benefits to a software company of marketing vaporware are commonly perceived to be that they can ward off announcements of similar products from rival companies as well as generating an ongoing interest among the media well ahead of the genuine delivery date. Bao points out that commonly it is thought that vaporware is the non-product of the dominant firms.
However, in this latest study into vaporware, Bao challenges the conventional wisdom and demonstrates that the success of the vaporware strategy depends on the tradeoff between the market freezing effect and the cannibalization effect. Specifically, he says, vaporware is actually an effective strategy only for companies with a sufficiently low market share and for new products that offer a large improvement in quality and features over existing products on the market.
Bao points out that occasionally what might be seen as a vaporware product may be a genuine announcement and subsequent technical delays, an honest error in forecasting delivery date perhaps caused by R&D problems or bugs discovered late in beta testing. Vaporware is certainly a fact of life backed up by statistics and incidents. Recent alleged examples discussed across the blogosphere include Microsoft’s Xbox Live Anywhere on Vista (Vista itself was vaporware for a long time), the XO 2.0 laptop from OLPC, the Linux phone operating system, OpenMoko, and PCWorld magazine offers an interesting Top 15 of all-time vaporware products and Crave has a feature on some of the more peculiar examples of vaporware. And, of course, it remains to be seen whether Windows 7 (the touch-sensitive successor to XP/Vista) is merely PR puff to ward off migrations to Linux.
There have been several instances of vaporware that have significantly impacted in a detrimental way on the products and the companies peddling the vaporware. For instance, Lotus’s 1-2-3 spreadsheet was more than a year late in delivery, which allowed Microsoft and Surpass to enter that market sector, while Lotus apparently rested on its laurels. Borland nudged its way into the word processor market soon after WordPerfect preannounced their new word processor, which was delayed by nine months.
So, asks Bao, why do some firms engage in vaporware even when the strategy apparently cannot deter competitor entry into the market? General market dominance does not seem to be a factor, according to Bao. Indeed, Palm’s pre-announcement and subsequent delay of its new m500 PDA in 2001 led to massive losses and the disposal of staff and cancellation of a new plant. Vaporware is not cheap talk, says Bao.
In conclusion, Bao suggests that vaporware really is only optimal for a firm with a sufficiently low market share and for a truly innovative, or significantly improved, product. “To eliminate the vaporware incentive, he proposes a signaling price mechanism.” His mathematical analysis of this proposal shows perhaps counterintuitively that a lower price signals better product delivery capability. “The analysis of the proposal is not statistical in nature but purely mathematical,” Bao told Sciencetext, “I employed a game-theoretic method to analyze the signaling mechanism. Whether or not it works in the real world calls for an empirical test.”
So, are we likely to see the end of PR puff pieces and vaporware? What do you think?