Tuesday, March 06, 2012

How to Kill a Big Company

I always laugh everytime someone says: "here is a new technology that will kill the X company!" Why we want to see the fall of a company, it's something beyond me. Perhaps because we all like to see new hero to raise to fight the evil domination, but once the hero wins and becomes the new dominant rule, we call him the new evil and look for another hero to raise. I guess Guy Kawasaki is right, we men always like to kill.

Obviously in computer networking field I've been hearing about the SDN/openflow concept which is really interesting. So many posts flying around on the Internet to talk about it. But one that caught my attention recently was from the great Packet Pushers here. My post today is not about the debate between openflow versus traditional networking technology. The question is, will new technology like SDN/openflow really kill big networking companies like Cisco or Juniper?

Many years ago, I heard many open source folks who shout "Linux will kill Microsoft", "open source is the future", "here is the apps that will kill Microsoft Office". And how is Microsoft today?

I have to be straight here: we techie or geek will never understand why good product sometimes doesn't sell.

We always need good and new innovation. There are many problems in the world that need new technology. But once new product comes up, will it be able to kill the 'traditional' or today's business model that utilizes the current technology?

I use Mac and until now can't get away from Microsoft Office due to the business community where I'm at that still rely on it. Masses out there still get Microsoft Windows OS pre-installed. And majority of today's network devices communicate to each other using the infrastructure built by the two big networking vendors.

I'm not saying Linux is not good nor openflow is not brilliant. But to make bold statement one new innovation or technology will kill the big company, I would say is a bit naive.

These are the facts for those who want to kill big company:

- there are many "today's problems" that being solved by using "today's solution". Openflow is good but until we see the acceptance from masses to confirm it can solve all today's problems, I would consider it just as another great innovation
- based on our experience in the past, usually it's the support from the big company that can make new innovation or new technology gain the momentum in the market
- the thing is, today's big company is in the middle of the market, they talk to the customers, they know what the customers want vs need, they can map business justification of what and when the new technology should be introduced to the market. These market knowledge is obviously an advantage and less likely in possession on the researchers who made the innovation or some start-up companies who try to make the products based on the new technology
- even if the big company is late to introduce new technology, they have huge customer bases who currently trust them as the business partner. It will be easier for the big company to come up with the products later on while introduce some enhancements, and the existing customers most likely will stick with them and won't take risk to move to a new company
- and let's just say the big company is still very lame (even company like Cisco spend about 1 Billion USD annualy for R&D, let's assume they are completely in the wrong direction) when they see the new innovation is gaining momentum through some start up companies, what's stopping them to acquire those start ups? :)

Based on my limited view working for several big companies like IBM or Cisco, I believe it's not the new innovation that can kill a big company. Big company can simply adapt to changes. That's why IBM remains big today because they switched from one large mainframe mindset to distributed computing architecture while ago. They survive. I guess Cisco and Juniper will survive too from openflow since now they adapt to it. Look at Juniper QFabric and latest Nexus development and you will see.

But few things that can kill a big company are: inflexibility, inefficiency and wrong decisions. And bad publications. Wrong vision is fine, as long as the company is flexible enough, and efficient enough to change the direction. With good way to deliver the message on the news too.

But if a company is so stubborn and keep making wrong decisions, combined with bad messages in page 1 news, someday the investors will pull out.

And that's how to kill a big company.


Anonymous said...

yep...Linux was grabbed by Vmware and they rule in virtualisation...
same mindset...if cisco adopts openflow...cisco won't be killed...

anas said...

here is what is happening lately: