The Difference Between ‘Foothold’ and ‘Lock-In’

There is always a lot of talk within IT marketing around vendor ‘lock-in’.  This is most commonly found within competitive marketing, i.e. ‘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 ‘foothold.’  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, that’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 ‘Build a better mousetrap method’, but these are the two methods I’ll discuss.

Foothold:

Foothold is like the beachhead at Normandy during WWII, it’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 NetApp’s NFS/CIFS storage, which did the file based storage job so well they were able to convert their customer’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.  They’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, we’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 HP’s traditional foothold.

From my perspective both are strong moves, to continue to grow revenue you eventually need to branch into adjacent markets.  You’ll here people cry and whine about stretching too thin, trying to do too much, etc, but it’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 HP’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?

Lock-In:

You’ll typically hear more about vendor lock-in then you will actually experience.  that’s not to say there isn’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 that’s part of foothold and the fact that they add proprietary value.

The best real example of lock-in is blades.  Don’t be fooled, every blade system on the market has inherent vendor lock-in.  Current blade architecture couldn’t provide the advantages it does without lock-in.  To give you an example let’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 can’t help.)  Your obviously going to buy from the chassis vendor because blades themselves don’t interoperate and you’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 you’ll probably purchase another from the same vendor, because you know and understand its unique architecture, that’s not lock-in, that’s foothold.

Summary:

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 you’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.

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The Difference Between ‘Foothold’ and ‘Lock-In’, 5.0 out of 5 based on 3 ratings

Comments

  1. Thomas Jones says:

    Joe,

    A very informative post. Working for a vendor I’ve heard the term Lock-in often. I’ve always felt that it’s an overused and misunderstood term.

    My experience has shown that this term is usually used by whomever is your competition in a given space to invoke fear/hesitation in the Customer. From the blog it seems that you’ve encountered this also, correct?

    This post does an excellent job of not only showing the difference but sheds light on the fact that with today’s infrastructure there is no lock-in.

    /r
    Thomas

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  2. Thomas,

    Much appreciate your continued reading and feedback. I’ve definitely experienced this in the same way you have. It’s typically a Fear Uncertainity and Doubt (FUD) tactic. In a few cases it’s warranted but most of the time it’s not the case. It’s been a long time since we had true lock-in in the average data center. Main frames come to mind, but even in the case of mainframes there are some major advantages to the sacrifice of flexibility.

    Joe

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  3. For those that aren’t familiar Thomas is a friend of mine with an excellent blog of his own. Check out his musings and podcasts on all things tech. Great stuff!
    http://www.niketown588.com/

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  4. Thanks Joe. Very good post. The notion of lock in is changing and many are aware of what that looks like. With a foothold strategy companies can great “lock in” by providing value thus exanding their territory as you mentioned.

    Come by the blogger lounge for sure at VMworld we’ll be there with live video

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