User groups used to be a forum for dialogue on development. Vendors now find individuals a better source of feedback.
Under a cloudless blue sky, palm trees and fountains ring the beach-front San Diego conference centre. Inside, the convention hall slowly fills to capacity as people await the start of proceedings. Finally, with a fanfare of trumpets and a roll of drums, 'renowned recording artist' Leonard Tucker launches into a song, accompanied by an inspirational video that fills the vast screens behind the podium on which he stands. 'The world unites in hope and peace,' goes the refrain. 'It's the power of the dream that brings us here.'
At the song's conclusion, Don Groesser, an IT manager at US railway company Union Pacific Railroad, takes his place as chair of a two-day conference.
He inaugurates the proceedings by urging all 1,400 people in the hall to stand up and declare that they are 'happy to be here'. Clearly dissatisfied with the response, he repeats the performance. At the second attempt, the decibel level is noticeably higher.
This, believe it or not, is how the corporate customers of computer company NCR began their annual user group conference last year. Overtly American in character it may have been, but in its key ingredients, the occasion was little different from hundreds of other such get-togethers around the world. These are IT users with a common interest cloistered in a convivial location, usually with the supplier of the product they all use.
Generally funded by members' subscriptions and revenues from conferences and seminars, user groups aren't a cheap pastime: with a range of software and hardware suppliers, a company can easily find itself belonging to a dozen or so user groups simultaneously. Membership of each costs several hundred pounds, although that may buy attendance rights for more than one member of staff.
Corporate membership of the Sybase user group, for instance, costs £400, but entitles a company to nominate 10 IT managers to attend events and receive information. Meanwhile membership of IBM's two principal user groups, GuideShare Europe and the IBM Computer Users' Association, costs SFr750 (£370) and £295 respectively.
Financially independent of IBM, the IBM Computer Users' Association illustrates the extent to which providing a forum for people to share their experiences has become a significant business in its own right. It has an annual turnover of over £500,000, explains its chairman, Martin Beckwith-Brown. This is generated by subscriptions and attendance fees, as well as conferences, which, though mainly aimed at the group's 800 corporate members, are also open to non-members.
Like most groups, it is run by volunteers - full-time IT directors and managers in the corporate world, who donate their time as well as their employer's cash to helping to run the group. Beckwith-Brown, an internal IT manager with Coopers & Lybrand - 'not as a consultant, I'm a genuine user,' he stresses - reckons running the group takes up around 10% of his time. Phil Howard-Knight, his opposite number at GuideShare Europe, and a vice-president of IT with Bank of America, estimates that his role 'takes up around 20 working days a year - plus weekends and evenings, of course'.
But what do user groups achieve? Do their conferences and meetings really serve a useful purpose - or are they simply a source of enjoyable corporate junkets and an opportunity for people to network with their peers at their employer's expense? 'The networking aspect is very important,' concedes Mike Rhind, an IT manager responsible for the human resource systems of BG (the erstwhile British Gas), and a member of software vendor PeopleSoft's European user group. 'It's an opportunity to share information and product knowledge with people facing similar problems.'
Martin Parker, a committee member of the Sybase group, and a divisional manager with OCS Consulting, concurs. 'Sometimes there's a long learning curve that you can greatly shorten by talking to other people.' What's more, user groups influence suppliers by adding collective weight to individual customer's views. Sybase, for instance, 'has to listen to us because we represent the views of the majority of members'.
Good news for both parties, surely. But such communication is not without its difficulties, asserts Philip Crawford, managing director of Oracle UK. 'The downside of a user group is that the relationship can become adversarial,' he argues. 'I don't want to be on the back foot all the time.' Nevertheless, he says, the company welcomes strong and well-informed criticism from its user group - provided that it is honest criticism, and not just criticism for its own sake. 'The key word is maturity,' he explains. 'We have to be mature enough to listen, and they have to be mature enough to be considered in the feedback that they give.'
And sometimes the lapse of manners is the fault of the supplier, rather than the user group. 'There's a tendency for the vendor to think that because they own the product, they own the user group,' charges Simon Moores, chairman of the fiercely-independent Lotus user group, whose members pay £795 for a seven-person corporate membership. For while many user groups are financially independent of suppliers, not all enjoy this freedom.
Networking company 3Com, for example, withdrew funding from a user group two years ago, leading to its demise, only to help bring into being another - presumably more pliant - group.
But adversarial or not, better-informed and more user-responsive product development would surely seem to be one area where the interests of user groups and suppliers coincide. Products more closely tied to users' needs give users what they want while offering suppliers cut-price market research - thus helping to boost sales. Is it really that simple?
The arguments are more subtle than would first appear to be the case.
To begin with, user groups themselves are changing, says Moores. Pointing to the disappearance of a number of other groups, such as the Windows user group and the Windows Developers' Association, he argues that user groups are in the process of evolving towards a technical support and user-to-user networking role. They are consequently no longer so much a platform for a user-vendor dialogue on development issues. His members, he argues, increasingly want cost-effective support, 'and aren't naive enough to think that they can influence what goes on in development'.
Nevertheless, publicly at least, some suppliers still profess to be highly user-responsive. The humility shown by IBM's Lou Gerstner or NCR's Lars Nyberg in acknowledging the importance of their respective user groups reflects their joint recognition that in the world of IT, good market intelligence is a rare commodity - and the consequences of flawed intelligence are not infrequently fatal. Nyberg, not a man with whom the word 'humility' is readily associated, began his speech to the San Diego user group meeting with a fulsome tribute to NCR customers' loyalty through what he admitted 'had been some tough times' during the spin-off from US telecommunications giant AT&T.
Gerstner, similarly in debt, makes a point of regularly meeting user group representatives. Not so long ago, IBM famously failed to predict the extent to which the networked client/server personal computer would replace the mainframe. It paid the price with the declaration of corporate America's largest ever annual loss and the shedding of tens of thousands of jobs - one of which belonged to Gerstner's predecessor.
Yet finding out what customers are thinking is rightly regarded as a notoriously difficult exercise, irrespective of whether a conveniently accessible user group is there with its views or not. Eliciting the right answers requires first asking the right questions - which in turns calls for a certain clarity of vision. Had IBM thought to ask its customers, 'Are you thinking of replacing mainframes with networked personal computers?', it might have received more warning of the earthquake that was about to transform its business landscape.
Lacking even an inkling of what was going through its customers' minds, the questions weren't asked. The reason, hazards Neil Dunlop, IBM UK's user group programme manager, was that many group members 'were in the same mental box as we were' - and ultimately, as events transpired, paid the price with their jobs. 'We were in step, alright - but going in the wrong direction.' Even today, charges Phil Howard-Knight of IBM's GuideShare Europe user group, the extent of IBM's real interest is limited to new facilities in existing products. 'It still tends to make up its own mind on new products.'
Such caution may not be without foundation - particularly when the user group forms a small part of the overall user base. Clearly, the needs of enthusiasts and aficionados may not be representative of the needs of the user base at large.
Alert to such dangers, accountancy software firm Sapiens carefully ring-fences its expectations of its user group's input to the company's developers, explains UK managing director David Green. While group members - senior IT directors and managers from organisations like Abbey National, Norwich Union and AXA - provide guidance at the tactical level, strategic decisions are the responsibility of the company's software developers, with the user group 'acting as a reality check if required'.
Confirmation of the validity of this more arm's-length approach comes from two of the fastest-growing corporate IT vendors, PeopleSoft and Microsoft. PeopleSoft, now rated by Fortune magazine as one of America's fastest-growing companies in each of the past three years, has seen its worldwide user base grow to over 1,300 major corporations - bringing the personal wealth of CEO Dave Duffield, who founded the company in 1987, to $1.4 billion. A former software salesman, Duffield has put in place a highly structured approach to gathering user feedback, irrespective of whether customers belong to the user group or not.
Every year, corporate users are given a number of votes - known as PeopleDollars - according to the number of software licences that they have. (Companies such as AT&T, Hewlett-Packard and Siemens which use PeopleSoft globally have multiple licences.) Priorities for proposed enhancements are then based on the PeopleDollar votes each enhancement receives. Customer support and field sales personnel have a similar voting arrangement, and the results are ranked to construct the development programme.
At Microsoft, explains UK desktop applications marketing manager Oliver Roll, user groups again form just one part of the user feedback process.
While they do play a valuable part, he explains, their members may be too close to the product to form an independent enough view of its capabilities - particularly when compared with competing products. '80% of the features that people were asking for in the latest release of our office suite were already in the previous version,' he says. 'They just weren't very easy to find.'
Microsoft's development process, he explains, has several user-driven facets. One involves providing users with 'instrumented versions' of software, which record their every keystroke and mouse movement for subsequent analysis. Another involves analysing users' calls to Microsoft telephone support lines. Other techniques involve sitting alongside users in their offices watching how they actually perform tasks, and then repeating the exercise under controlled conditions in the company's 'usability labs'.
The development of the company's Exchange groupware product, launched last year, involved representatives from over 40 global corporations spending many man-months at Microsoft's campus based in Seattle.
As with PeopleSoft, the approach seems to deliver the goods, resulting in a level of functionality that has produced a sparkling increase in market share. As recently as 1992, Microsoft's share of the desktop applications market was minuscule, with the sales of company products such as Excel and Word dwarfed by those of Lotus 123 and WordPerfect. No longer: now, asserts Rolls, Microsoft has 83% of the office suite market, and 67% of the wordprocessor market. 'We actively encourage user groups - but they're only part of the picture.'
Microsoft's announcement in April of an 85% increase in third-quarter earnings to £640 million - largely on the back of Office 97's success - shows the strength of its approach. 'Office 97 is selling at three times the rate of any previous version,' says a company spokesperson. The moral, it seems, is clear. While users can and should influence product development, user groups may not be the appropriate vehicle to do this. Agreeable junkets or not, talking to fellow users may be more fruitful than talking to the supplier.