“Follow the money,” was the memorable quote from All the President’s Men. Deep Throat advised Bob Woodward that the key to understanding the Watergate mystery was the money.
Dave Hitz of NetApp considers Lock In to be a natural state of things with a fast evolving technology.
The root cause of vendor lock-in is lack of standards and interoperability. Standards don’t tend to emerge when innovation is fast. And innovation tends to be fast whenever customers have unsolved problems that make them unhappy. In the storage industry today, I see unhappy customers driving lots of innovation that makes it hard for standards to keep up. I predict that this cycle of unhappiness and innovation will continue for a while, because the problem keeps getting harder: installed storage capacity keeps doubling, and data keeps getting more business critical.
By the way, Hal Varian said in 1998 that lock in is going to get more prevalent. So Dave is not breaking any new ground here. I wonder if Dave knows Hal Varian?
Whether you supply information technology, or merely use it, you will benefit from understanding, classifying and measuring switching costs. The “friction-free” economy is a fiction; look for more lock-in, not less, as the information age progresses.
What is interesting is that in some respects they both miss an important component of lock in – Customers want value for their investment.
That is why Zerowait keeps adding customers for our NetApp Service, parts, upgrades and support business. Zerowait provides extraordinary value to the customer that their high priced OEM will not provide – (I get to toot my horn in my blog !). Another place where you can see customers striving to get better value out of their Storage investment is at the Toasters mailing list (toasters.mathworks.com) of NetApp users. There you will find all sorts of tricks on how to get more value out of your NetApp storage investment.
Are you fighting the vendors’ need to lock you in, or are you working toward creating an open and free market for storage equipment? Dave Hitz is a great guy, but he is a big shareholder of a company that profits on locking in customers to his equipment. Vendor Lock In is also a root cause of Vendor Myopia. Just look at that other fast growing company from Sillycon valley – SGI. They missed an obvious seismic change in the marketplace because they considered their customers locked in. In many ways, Sun’s troubles arealso because they considered Linux a toy that no Fortune 1000 company would use. Both SGI and Sun learned that Innovation can cause havoc to a Myopic business plan.
A simple way to fight NetApp lock in on price is to get quotes on the same equipment from IBM. Off The Record Research says that in Europe Customers are getting bids from both IBM and NetApp . Or give us a call and we will explain how to negotiate better prices and terms from NetApp.
Innovators recognize that Vendor Lock In is a cancer that kills innovation.
As Deep Throat said ” Follow the Money”