Why does it seem as though there are dozens of small companies that all do the exact same things? How does the market support it?
Excellent question. Let me answer the latter: No, the market does not support more than two competitors doing the same thing. The rest will eventually either perish or be forced to try something else. If the market has very specific requirements, it won't even support two.
It's a weird business. As soon as someone develops and markets a technology successfully, everyone else jumps on the bandwagon.
The typical mantra of the newly minted competitive offering is that it's cheaper or faster than the invention. Most often, they are neither. I don't blame the competitors for hopping into a hot space, but I question some of the decisions to enter nonexistent spaces with the same exact messaging. Everyone was a "virtualization" player a few years ago, which was great, except nobody bought virtualization.
Now it's information life-cycle management. In a legitimate market, there are always followers and imitators. EMC Centerra is a great example -- there was no such thing on the planet, until EMC came out with Centerra. In this example, the inventor (or acquirer of the inventor) reaped almost all of the rewards, but don't fret, everyone and anyone is hot to trot to jump on into this new market.
Eventually, someone will come up with a better mouse trap or change the game entirely and leapfrog EMC, but probably not by being called "Senterra -- the cheaper version."
It will happen the way EMC went cruising past IBM years ago, because the rules of the game changed. Hey, imitation is the greatest form of flattery -- or the most annoying. Look at my little company. Just because we were smart (lucky) enough to pioneer new ground and become the big cheese in the small pond we invented, you'd think others would try to do the same.
But no. Every time we launch a new service or offering, some hack makes the same claims within a short time. Some of these guys even use the exact same words because why have an original idea if you can take someone else's? The good news (for me, anyhow) is that it never works. Too small a pond, too specialized an offering. The point is that there are always wannabes, in my business, in yours and in life. Business is like junior high school. There are the popular kids and a huge ecosystem of not-so-popular kids acting just like the popular kids.
Then there is the not-at-all-popular, and couldn't really care less about being that popular, kid in the corner who ends up running some giant company -- firing the popular kids with glee -- and not even letting the wannabes in past the first interview. My 13-year-old daughter calls them "posers."
That's a pretty good description. So, reward those who create and deliver. That encourages innovation. Once something has become commoditized, feel free to reward the "cheaper" alternative with your business. In the interim, if you understand the problem you are trying to solve, you can sniff around and find out who the players are and who the posers are easy enough. It's when you don't really understand the true problem you are working on that things get fuzzy.
The go-go days of asinine venture-capital funding have abated, at least for now, so hopefully you won't see so many wannabes as often. Boy, talk about wannabes, those VCs. ...Send me your questions -- about anything, really, to email@example.com.
Steve Duplessie founded Enterprise Strategy Group in 1999 and has become one of the most recognized voices in the IT world. He is a regularly featured speaker at shows such as Storage Networking World and others, where he takes on what's good, bad -- and more importantly -- what's next. For more information about Duplessie or ESG, go to www.enterprisestrategygroup.com/.