The First Mover Disadvantage
November 19, 2009
The first mover almost always has to explain what this new wrinkle in storage is, how it works and why you might want it. I'll never forget the first deduplication company years ago that I met with, and how they tried to explain how deduplication worked. Basically, I got the impression that they were saying, "we are going to save you money but not store all your backup data," and that did not seem like a good idea to me. The second company that came through had the advantage of refining the message a little bit and building on the groundwork that the early mover laid.
Another luxury the second movers have is time. Time for the market to evolve and time for customers to absorb what this new technology can do. People rarely get it the first time. Repetition after all is the mother of perfection. Time is needed for the problem that the new company is solving to really become a problem. A great example is file virtualization or global file systems. We have seen a few of the early movers in the space disappear and others evolve or get purchased. In some cases, these companies may have acted before the extend of the need was clear; the problem appeared like a bruise not a broken bone. Now, unstructured data is a massive problem in many data centers, and they are actively looking to companies like F5 and AutoVirt to help address it.
The masters of the second mover advantage are the larger, more established companies that wait for the market to develop and for the various competitors to work themselves out before deciding which one to acquire. While it probably costs them more to wait until a leader shows itself, the extra money spent is well worth picking a more viable entrance to the market. Many end-users simply won't buy a new technology until it is purchased, not even OEM'ed, through a larger storage manufacturer. They know how to play the waiting game too.
There are exceptions to every rule. There are first movers who are successful or at least viable right out of the gate. These are addressing a problem that you are having right now or who fill a gap left by other manufacturers. Automated tiering solutions, like those from Avere, Storspeed and Dataram, are good examples. There is a gap between SSD and mechanical drives, and these companies are looking to fill it. Interestingly, an indicator of success for a market is how many of these companies enter at nearly the same time, thus avoiding being the lone pioneer getting all the arrows. Multiple organizations telling the importance of a technology increases the chances for success.