In 2001 Apple iPod wasn’t the first portable MP3 player. It wasn’t the first player with a hard disk. Apple wasn’t the first company to release a portable media player (video and pictures, in addition to music). Apple wasn’t the first company to provide an on-line music store. Apple wasn’t the first company to make and market a cell phone that also played music.
In 2001, Mac loyalists were the only people who could take advantage of the iPod. In April, 2003 they were the first to be able to take advantage of the iTunes music store. In October, 2003 that changed when Apple released a Microsoft Windows version of iTunes along with an updated device. While this increased the size of the market potential for the iPod, it wasn’t enough to make the iPod the No.1 portable music player.
Today the iPod (in all it’s forms, including iPhone) is the hottest selling portable media device and the iPhone attracts customers to the cellular services that offer it. Why? Is the iPod the best device available? It certainly isn’t the cheapest. Do people buy the iPod to get the white headphones? Possibly, but it’s highly unlikely.
How many times have you heard or read about the “iPod Killer”, the new MP3 player from XYZ Company that is going to impact the iPod/iPhone market share (I believe Google’s Nexus One and Motorola’s Droid are the latest entrées)? How many times did that actually happen? So, why is the iPod the best selling hand-held portable multimedia device? Why hasn’t any other company really cracked iPod market share? What’s so magical about the iPod?
The answer may surprise you. Consider the following three points:
- The problem isn’t building a better technical capable or technically superior device―most people don’t buy the iPod just for the technology.
- The problem isn’t crafting a better music store―again, people don’t buy the iPod because they’re in love with iTunes music store. In fact, an iPod isn’t even needed to purchase music from the iTunes music store.
- The problem isn’t creating a better software interface―people don’t buy the iPod to get the software since it can be downloaded for free.
So, what is the answer?
Starting in 2003 Apple solved the fundamental problem of the time. Prior to the iTunes music store, if you wanted just one or two songs from a CD (or record album if you could find one), you had to buy the entire CD and then use iTunes (or some other software) to rip the song or songs you wanted. In some cases, those tracks might have been the only tracks you wanted from the CD, period.
Apple changed the rules. They negotiated a per-track price with various record labels making it possible to buy just the songs you wanted, instead of the entire CD. While that was obviously a major change for the music industry, it wasn’t sufficient to make the iPod No1. What Apple understood was ease-of-use. It was possible to just put a CD into the computer and iTunes promptly copied the entire CD, or just the songs you wanted, to the hard drive.
Similarly, it was possible to find the desired music in the iTunes easily. In either case, it was a simple matter to just drop the iPod into its docking station. Synchronization between the iPod and computer was (and still is) totally seamless: everything gets updated, play counts, play lists, new music, etc. all on its own. Not only that, if changes are made while the iPod is still attached to the dock, relevant changes are automatically applied to the iPod.
There is another aspect that specifically relates to the iPod Touch and iPhone (and to a lesser extent the iPod Nano) and that is the iTunes app store. It is just as easy for people to find, purchase, and download applications for their devices as it is music. They can do it from their device or from their computer.
The seamless nature of the iTunes music store carries over to the app store. In one spot, users can get music, podcasts, applications, and more. This seamless approach creates a benefit for developers that creates an incentive to develop more applications. Apple integrates vendors (application developers and the other content providers) into a seamless experience. (Note: I’m not talking about the application selection/rejection process used by Apple.)
So, once again you ask: “What does the iPod have to do with IT service management?” Before answering that question let’s examine two definitions from ITIL v3 and their ramifications:
- ITIL V3 defines service management as “a set of organizational capabilities for providing value to customers in the form of services.”
- Service is “a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific cost and risk.”
If we put the two together we get this: service management is a set of specialized capabilities for providing value to customers by facilitating outcomes customers want without the ownership of specific costs and risks.
The value proposition is understanding what the customer values (facilitated outcomes) and then delivering/meeting the value required. Customers don’t care about the technology inherent in a solution. It’s not about building a better mousetrap (the technology). It is about the figuring out how to make the mice less visible (solve the problem; the reason someone wants a mousetrap).
Services are measured end to end. Everything in between, from a user’s perspective, just has to work, which, don’t groan, brings us back to the iPod. What Apple did was make the entire end to end experience seamless, easy, and not about the technology. Although there is a lot of technology built into the iPod, the technology doesn’t get in the way, it just works.
The reason the iPod is the No.1 portable music device is because Apple didn’t attempt to just build a good player they put together a complete end to end experience with a good device, good software and good music store. All of the pieces work seamlessly and easily. Any company that attempts to compete can’t do it at the device level, or the software level or the store level. Apple changed the game―not just the rules.
It’s not just product success that matters as much as it is seamless end-to-end service provisioning that integrates third-party providers.
Apple recognized services, not technology, as critical to capturing market share. Apple was the first company to connect the dots and put all of the pieces together into a cohesive, easy to use, end to end service―not just for users, but for developers, too. Any competitor that thinks they can compete on any individual piece doesn’t understand the new value proposition Apple created.
There’s nothing magical about the iPod by itself. The magic, the lesson if you will, is that end to end services that solve customer problems and facilitate outcomes customers want to achieve are clear differentiators. Delivering services instead of technology also makes it harder for competitors that attempt to compete on the basis of better technology and also helps increase customer loyalty at the same time.
The new winners will be the organizations that develop the specialized organizational capabilities to understand, anticipate and deliver value to customers in the form of services that facilitate the customer’s desired outcomes. And that’s what the iPod has to do with IT service management.
David Moskowitz is a principal consultant at Productivity Solutions, a Philadelphia-based consulting firm that helps its clients thrive in an eBusiness Web-based economy. He is a certified ITIL expert and instructor and an ITSM consultant. In these capacities, he has guided many successful projects. The goal for his efforts is to improve both the efficiency and effectiveness of IT organization at the same time that the business recognizes IT as a strategic asset. His focus working with clients, for more than 25 years―predating the formal naming―has been IT service management. He can be reached at [email protected].