How do the choices made by others affect your own options, and how should you evaluate new software? Those are two of the questions facing Brent North, managing partner of Stantec's Vancouver office, as he considered using a new three-dimensional drafting tool.

Founded in 1954, Stantec is an architecture and engineering firm that evolved from a single-person consultancy into a publicly traded corporation with more than 100 offices worldwide and 6500 employees through a combination of acquisitions and natural growth. The Vancouver office, which has recently been acquired by Stantec, has approximately 125 professional staff and is largely focused on architecture.

Architecture has changed a great deal in 60 years. While grounded in creativity and design, architects today are far more proficient in computer technology. Although some of Stantec's senior architects still look fondly upon the slide rules and Mylar plastic that was used to create designs in the past, modern-day architects are far more likely to turn to their computers and use Computer-Assisted Design (CAD), and engineering tools such as Computer Aided Manufacturing (CAM) and Computer Aided Engineering (CAE). There has been a large and growing market for these products, and numerous suppliers delivered a variety of tools. However, as in other software markets, one or two suppliers dominated and acquired the majority of the market share, and the other software products occupied niches that lacked widespread adoption. An example of a niche product is CATIA (Computer Aided Three-Dimensional Interactive Application), from Dassault Systems, widely used in manufacturing at Chrysler, General Electric, and Airbus (and had been used by Frank Gehry to design the Guggenheim Museum in Bilbao, Spain).

Several years ago, Stantec adopted AutoCAD by Autodesk. The de facto standard program, at that time AutoCAD had approximately 80 percent adoption among architectural firms. Virtually all new architects had been taught how to use it while in university and, provided they were using the same version, cooperating firms working on large projects could share and transfer files knowing that they were compatible and interchangeable.

Although Brent is generally satisfied with Stantec's existing software tools, he has recently become aware of a product with features and capabilities that he thinks can change the way Stantec competes. What concerns Brent, however, is the level of training required to make the change and the advantages of remaining with the industry standard. Not only will the new product require education and adjustment among the architects, but it is also incompatible with AutoCAD. While the new program can open files created by AutoCAD, files created by the new program cannot be used by AutoCAD. This means that if Brent brought the new product in for a trial, he would no longer be able to easily cooperate with other firms on joint projects and, perhaps more importantly, it could reduce the level of cooperation and sharing within the firm. At the same time, he knows that, if pushed to the limit, this kind of conservative thinking will hold Stantec hostage and prevent positive change. Is it worth considering a new and incompatible productand if he brings it in for a trial, how should he proceed?

Questions

1. How do the challenges faced by Stantec differ from those faced by other industries? (Hint: Think about sharing files among students for group projects.)2. What are the implications of this case for companies that develop new software tools? How could adoption barriers be reduced? (Hint: Think of disruptive technologies.)3. Are there any examples of inferior technologies that have achieved lock-in and would therefore be hard to improve? (Hint: You probably have used one already today.)4. How do the ideas of switching costs and of networks effects relate to high technology? Do they exist in other industries? (Hint: Consider the railway industry, for example.)5. ow should new software be evaluated?How important is market share? Are these factors more or less important to smaller firms?