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Technology Stocks : Network Appliance
NTAP 115.78+3.1%Dec 2 3:59 PM EST
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To: DownSouth who wrote (3267)5/15/2000 4:41:00 PM
From: kas1  Read Replies (1) of 10934
 
Isn't this strategy sort of what Christensen's book tells large firms to do? Sell a leading-edge product even if not many customers want it, even if it loses money?

The strategic rationale for EMC would be twofold: achieving some sort of lock-in with customers (since vendor-switching costs are not negligible), and maybe starving out NTAP. Yup, it's just like the mainframe days.

This is a bit like Microsoft giving away Internet Explorer for free. Of course they lost money on that product per se, since they spent money writing and distributing it, and didn't charge a penny for it. But unlike Netscape, which was (at first) a one-pony show, Microsoft's other businesses could subsidize that loss leader business.

So DS, do you think NTAP's product has a sufficient technological advantage so that even if EMC were to pull a Microsoft, customers would still buy the NTAP product?
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