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Lock-in and the Costs of Switching Mainframe Computer Vendors: What Do Buyers See?

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Author Info
Greenstein, Shane M

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Abstract

This paper closely studies the historical experiences of computer users faced with incompatibility problems. One key point throughout the discussion is that operating system compatibilities and application software were the principal source of switching costs. The larger point here is that vendor specificity is partially a choice-variable for the buyer. It influences many facets of an organization, as well as management and employee behavior. Foresighted users anticipate that daily decisions regarding programming practices and equipment maintenance influence the costs of switching during a later vendor decision. Buyers take a wide variety of actions, both simple and complex. Most of the paper is concerned with documenting and analyzing how buyers change investments, collect information, manipulate bidding procedures and change managements practices--either in anticipation of, or in response to, incompatibility problems. Copyright 1997 by Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Industrial & Corporate Change.

Volume (Year): 6 (1997)
Issue (Month): 2 (March)
Pages: 247-73
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Handle: RePEc:oup:indcch:v:6:y:1997:i:2:p:247-73

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  1. Mahnke, Volker & Overby, Mikkel Lucas & Özcan , Serden, 2004. "Strategic Posture and Outsourcing," Working Papers 2004-18, Copenhagen Business School, Department of Informatics. [Downloadable!]
  2. David ,P. A. & Geuna ,Aldo & Steinmueller ,W. Edward, 1995. "Additionality as a principle of European R & D funding," Research Memoranda 009, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  3. Timothy F. Bresnahan & Shane Greenstein, 1997. "Technological Competition and the Structure of the Computer Industry," Working Papers 97028, Stanford University, Department of Economics. [Downloadable!]
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