There is always a lot of talk within IT marketing around vendor â€˜lock-in’. This is most commonly found within competitive marketing, i.e. â€˜Product X from Company Y creates lock-in causing you to purchase all future equipment from them. In some cases lock-in definitely exists, in other cases what you really have is better defined as â€˜foothold.â€™ Foothold is an entirely different thing.
Any given IT vendor wants to sell as much product as possible to their customers and gain new customers as quickly as possible, thatâ€™s business. One way to do this is to use one product offering as a way in the door (foothold) and sell additional products later on. Another way to do this is to sell a product that forces the sale of additional products. There are other methods, including the â€˜Build a better mousetrap methodâ€™, but these are the two methods Iâ€™ll discuss.
Foothold is like the beachhead at Normandy during WWII, itâ€™s not necessarily easy to get but once held it gives a strategic position from which to gain more territory.
Great examples of foothold products exist throughout IT. My favorite example is NetAppâ€™s NFS/CIFS storage, which did the file based storage job so well they were able to convert their customerâ€™s block storage to NetApp in many cases. There are currently two major examples of the use of foothold in IT, HP and Cisco.
HP is using its leader position in servers to begin seriously pursuing the network equipment. Theyâ€™ve had ProCurve for some time but recently started pushing it hard, and acquired 3Com to significantly boost their networking capabilities (among other advantages.) This is proper use of foothold and makes strategic sense, weâ€™ll see how it pans out.
Cisco is using its dominant position in networking to attack the market transition to denser virtualization and cloud computing with its own server line. From a strategic perspective this could be looked at either offensively or defensively. Either Cisco is on the offense attacking former strong vendor partner territory to grow revenue, or Cisco on the defense realized HP was leveraging its foothold in servers to take network market share. In either event it makes a lot of strategic sense. By placing servers in the data center they have foothold to sell more networking gear, and they also block HPâ€™s traditional foothold.
From my perspective both are strong moves, to continue to grow revenue you eventually need to branch into adjacent markets. Youâ€™ll here people cry and whine about stretching too thin, trying to do too much, etc, but itâ€™s a reality. As a publicly traded company stagnant revenue stream is nearly as bad as a negative revenue stream.
If you look closely at it both companies are executing in very complementary adjacent markets. Networks move the data in and out of HPâ€™s core server business, so why not own them? Servers (and Flip cameras for that matter) create the data Cisco networks move, so why not own them?
Youâ€™ll typically hear more about vendor lock-in then you will actually experience. thatâ€™s not to say there isnâ€™t plenty of it out there, but it usually gets more publicity than is warranted.
Lock-in is when a product you purchase and use forces you to buy another product/service from the same vendor, or replace the first. To use my previous Cisco and HP example, both companies are using adjacent markets as foothold but neither lock you in. For example both HP and Cisco servers can be connected to any vendors switching, their network systems interoperate as well. Of course you may not get every feature when connecting to a 3rd party device but thatâ€™s part of foothold and the fact that they add proprietary value.
The best real example of lock-in is blades. Donâ€™t be fooled, every blade system on the market has inherent vendor lock-in. Current blade architecture couldnâ€™t provide the advantages it does without lock-in. To give you an example letâ€™s say you decide to migrate to blades and you purchase 7 IBM blades and a chassis, 4 Cisco blades and a chassis, or 8 HP blades and a chassis. You now have a chassis half full of blades. When you need to expand by one server, who you gonna call (Ghost Busters canâ€™t help.) Your obviously going to buy from the chassis vendor because blades themselves donâ€™t interoperate and youâ€™ve got empty chassis slots. That is definite lock-in to the max capacity of that chassis.
When you scale past the first blade system youâ€™ll probably purchase another from the same vendor, because you know and understand its unique architecture, thatâ€™s not lock-in, thatâ€™s foothold.
Lock-in happens but foothold is more common. When you here a vendor, partner, etc. say product X will lock you in to vendor Y make that person explain in detail what they mean. Chances are youâ€™re not getting locked-in to anything. If you are getting locked-in, know the limits of that lock-in and make an intelligent decision on whether that lock-in is worth the advantages that made you consider the product in the first place, they very well might be.