Value and Product Acceptance Hierarchy
In the world of technology, the value of a product is often seen as the sum of its features and benefits. However, an important component that is often missed is the value created when there are other users of a product. This concept, known as the Lattice of Value, plays a significant role in the resilience of Microsoft's Windows, even in a market where a competitor like Linux is available for no cost.
The Lattice of Value, proposed by HCI expert and university professor Alan Dix in a talk to the University of Technology, Berlin in 2008, is a way for designers to encourage adoption by different groups of users and to defend a product when a new product comes to market. It emphasises the importance of considering the shared value created by other users when evaluating the value of a product.
For Windows, this shared value encourages more users and more developers to buy the operating system. Users derive value from being able to use their computers, which requires an operating system. Software developers, on the other hand, derive value from being provided with an operating system for their software to run on. This shared value extends the value in the operating system beyond the first use, as it allows for the sale of software to users and the extension of computer use with purchased software.
However, the shared value provided by all the other users of an inferior product can make it difficult for a new product to compete. Replacing Windows would require replacing all the software that goes with it, leading to a learning curve, costs for training, and potential compatibility issues with existing software used by clients or suppliers. Convincing people to abandon their existing operating systems and switch to a new one can be challenging.
In the case of a custom-made operating system, this challenge is magnified. A software developer offering a custom-made operating system may seem like good value, but it's not if the system isn't compatible with existing software. Existing software requires specific operating systems to run, and a custom-made operating system may not be compatible with them. To use a custom-made operating system, you would need to sell it to other people and wait while they develop software to run on it.
The Lattice of Value represents the idea that unique value can be created for each set of user groups, and in turn, create additional shared value. This lattice of value represents various factors that contribute to the overall value of a product, interconnected and dependent on each other. In a market where competition is fierce, understanding and leveraging the Lattice of Value can give a product a significant edge.
