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Brockman Cracks Down on Interfaces

January 23, 2010

At lunch today, a colleague asked me what Reynolds’ strategy might be, with regard to shutting down DMS integration.  We have both worked on “unsanctioned” interfaces previously, and he wondered if dealer backlash might yet force Reynolds to change course.

They offer “certified” alternatives, which generally do not meet the commercial or technical needs of the ancillary systems. 

Most readers of this blog already know the story.  Dealers depend on their DMS, but they also need several other systems.  These ancillary systems share data with the DMS using a variety of techniques, none deemed safe or reliable by the DMS vendors.

For as long as I can remember, the vendors (ADP as well as Reynolds) have threatened to shut down these rogue interfaces.  They offer “certified” alternatives, which generally do not meet the commercial or technical needs of the ancillary systems.  With no DMS interface, the ancillary systems perform poorly.  The dealers suffer, and then defect to another DMS.

So, my friend wondered, will Reynolds continue shutting down DMS interfaces even if it means alienating scores of dealers?  Is the new CEO, Bob Brockman, really so adamant?  Well, I said, Mr. Brockman is known to prefer high margins rather than market share.

I observed that, under Brockman, Reynolds has ramped up its software development capacity.  He must recognize that every ancillary system represents a weakness in Reynolds’ product line, and every interface enables a competitor.

In Brockman’s position, I would first redouble my efforts to compete across the product line, and then I would cripple my competition by shutting down their DMS interfaces.  When dealers complained about losing their favorite, say, desking system, I could then offer an integrated product suite – without those nasty security issues.

This strategy is exactly how Microsoft parlayed the dominance of Windows™ into dominance for its Office™ suite.

One Comment leave one →
  1. Chris Grimes permalink
    February 1, 2010 1:43 pm

    I agree from a business strategy this ‘Brockman’ path may seem on the surface to be fruitful but in reality the demise of his former venture: UCS, a dying DMS, should be proof enough to the contrary. In the DMS world the true ‘issue’ at hand is ownership and not security. Security is merely a guise for what is truly at play which is the inability of R&R to compete in arenas in which they should be trump. The years and years with lack of innovation are now catching up to the sleeping giant and the alienating of their own customer base with the current business practices will be their demise.

    The analogy to Microsoft is in my opinion void as they definitely implemented anticompetitive practices but never dictated, say, what word processer you could use. The loss of market share with WordPerfect had as much to do with their own shortcomings as it did with competition. The true analogy would have been if Microsoft told users they could use their MS Word (with a paid license) but if they wanted to distribute the letter they created then they would need to pay them a fee. And if this document had anything that would be detrimental to their business that fee would be so high that it wasn’t worth sending. A de facto ‘loss of ownership’ of what they created.

    It’s a sad day when DMS provider tells a dealer who he or she can do business with. The frustration on the Dealer level is at an unseen point and the damage caused by these actions will be revealed as the mass exodus happens with the expiration of their current dealer base DMS contracts.

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