So, a couple of weeks ago, I had an interesting conversation going with a fellow blogger Steve Duplessie about our prospects versus a certain vendor of IT gear and office supplies. Steve’s contention was that our competition’s ability to push the “commodity envelope” would give them a strategic advantage.
At the time, I argued that pushing the commodity envelope (i.e. making things cheaper) only gets you so far. You start running up against diminishing marginal utility--at some point customers stop looking for cheaper mousetraps and start looking for better mousetraps. At some point you need to innovate as a way to create competitive or operational advantage, or you better figure out how to run your business on commodity margins.
This week, our FabricPath announcement served as a great reinforcement of that point. Simply, new challenges require new thinking. The challenges put forth by broad scale virtualization and federated server application environments needed a fresh approach. In this case, FabricPath gives you new functional benefits that map quite nicely to the demands of these emerging DC environments, while still reducing both CapEx and OpEx. Simply taking existing technology and making it cheaper doesn’t buy you anything in his case. I don’t care if you can deliver 10GbE ports for $10 a pop, they are still not going to solve these emerging challenges--in the end, there is no substitute for vision, expertise and R&D follow-through.
I guess there is always the “fast follower” argument--let someone else innovate and we will imitate, but that only really works out if you can follow with a better solution. Google was a fast follower of Alta Vista and the Zune was a fast follower of the iPod (which itself was fast follower), but Google and Zune both went in very different directions.