About nine years ago, a company in Delaware developed some software that was an immediate hit with the military. It was cheap, easy to use, and did the job well. (I'd better not be any more specific about the nature of the software than that.) When my company bought out that other company, the Army suddenly became our biggest customer. Initially we couldn't get a traditional government contract. The Army preferred to buy our software as "commercial off-the-shelf."

Simultaneously, the Navy acquired similar software via the contractual route, making a deal with one of our competitors (I'll call it BodiTech). For some time the two programs coexisted peacefully. Everyone in the user community knew that the Army used our software, and the Navy used Bodi's.

By 1998, the Army's user base had grown to over 400 licensed copies, and someone at the Pentagon decided that a contractual relationship would allow them to better manage the software. Everyone assumed we would be awarded the contract, since we were the incumbent. To our amazement, after negotiations were over, the contract went to BodiTech.

Bodi spent about a year re-engineering the Navy product at a cost of US$9 million, and delivered a version that couldn't be installed without hosing the Army's systems. Because Army interfaces and operations are fundamentally different from the Navy's, even when you got the app running, it was difficult to use. Users who loved our product protested bitterly. But their superiors just told them the old joke about how there's the right way, the wrong way, and the Army way -- and guess which way you're gonna go?

Meanwhile, the Army paid BodiTech another $5 million to fix the problems. When months passed with no joy, however, the generals gave up. The Army issued an official statement declaring that our software was now the "system of record."