More than 70 years ago, Gillette turned marketing upside down when it gave away razors to sell more Blue Blades. The Gillette model has become standard operating procedure on the Net. Netscape is the most famous example of strategic generosity. By allowing users to download its Navigator software for free, Netscape created a new technical standard. And because it established a standard, Netscape was able to sell so much server software and related products that it became the fastest-growing software startup in history.
Open systems win over time.
Companies that follow Apple's proprietary model are doomed to suffer the same consequences. The smarter course is to embrace emerging standards and innovate within them. Consider the market for notebook computers. The leading products are all perfectly compatible with one another and with the broader environment in which they operate. Yet each offers distinct benefits and features.