From selling machines to selling systems with the processing software inside (1990)

Putting a price on twenty years of collecting

With one sentence — “what we manufacture here is processing software” — the showroom was re-read from a device for drawing crowds into a collection point for machining know-how. Sixty thousand programs on a mainframe, and a hit rate at which 60% of a customer’s requirement could be met by modifying something already on file, are numbers no company could produce without twenty-odd years of direct selling that brought the customers to its own door. The 1990 turn was less the invention of a new business than the act of putting a price on a by-product of the 1965 decision.

At that point, however, software was only a fifth of sales, and the business was still, at its base, selling sheet-metal machines one at a time. Contemporary trade coverage set the near-halving of showroom visitors beside the fact that nine-tenths of the customers were small and mid-sized firms, and judged that in the market for systems Amada would run into rivals whose customers had more resources. Calling software a pillar of earnings would take until the “second founding” of 2003 and beyond. The substance of this turn lies in having begun stockpiling the answer twenty years before the question — what do you sell once the machine itself no longer differentiates you.