Oh, man! We killed Mr. Burns! Mr. Burns is gonna be so mad! – Homer Simpson
One of the most annoying questions I had to answer in last couple of years was “Why can’t Cisco\IBM\Microsoft\VMWARE\HP easily copy what you do?”
To some extent, it is another variation of the annoying “What’s your intellectual property?”
Both of the questions are studied in first year MBA courses .They seem to make sense at a first glance, but I would try to show they are highly overrated questions.
The underlying assumption is that BBG (Big Big Giant) can use its amazing resources, huge capital , loyal customer base and brand to kill any small company if the small company does not have a great barrier to entry, which is typically a technological one.
Having worked in few BBG’s and couple of Start-Up I beg to differ. The giants tend to fail themselves.
Lets start with some questions:
- Why was Sun unable to succeed with its own firewall (SunScreen?) when it tried to stop OEM’ing Check Point’s?
- Why was Check Point repeatedly unable to take the SOHO firewall market (FireWall-First, Small-Office, Safe@Home,Secure-1) ? NetScreen took if from CP. Then Fortinet did the same thing for NetScreen.
- Why does Microsoft still lack significant footprint in the Firewall business?
- Why does Microsoft ten billion dollars research budget fails to copy Google’s search algorithm for ten years?
- How come Google Video lost to YouTube?
- Why is VMWARE leading over Microsoft in virtualization? Microsoft acquired Connectix in 2003. Connectix virtualization technology was almost as good as VMWARE’s at the time. Today there is a big gap in market share.
- How come IBM , with years of building super computers does not have an elastic cloud solution?
- How does small Riverbed perform so well among the networking giants?
- What was the huge intellectual property in Windows that OS2 lacked?
Here is a hint to my proposed answer to why giants fail, details to follow on part II :
- Golden Cage Syndrome.