JFeib,
<Open Q) Need help from those who are fluent in the lingo and theory of Moore's The Gorilla Game. Tamson F., Moore's Chapter 2 is on How High Tech markets develop. Sans are early in their adoption, but how early? Tamson F., others are we just crossing the chasm, in the bowling alley, has the tornado started? Thanks for opinions.>
With apologies to Mssrs Moore, Johnson and Kippola.
Assuming Sans are a discontinuous innovation(a big assumption),that is they will replace server attached storage, the authors suggest five types of adopters in the technology adoption life cycle: Technology Enthusiasts(Innovators), Visionaries(Early Adopters), Pragmatists(Early Majority), Conservatives(No manual recount & Late Majority), and Skeptics(Laggards). All of these categories should be measured against a backdrop of these IDC projections for hub and switch revenues(since updated). 1998=?, 1999=$200million, 2000=$600million, 2001=1.1billion, 2002=$1.8billion, 2003=$2.6billion.
Technology Enthusiasts. My read here is that this would include the Boeing, Litton and Geoquest installations of 1998(?).
Visionaries. Visionaries....."examine discontinuous innovations for opportunities to radically reengineer their company's business processes in ways that might totally preempt a competitive response." I would include here the Caterpiller Inc San installed by Forefront Graphics as well as most of the other graphic intensive Sans. I remember a number of film and tape production companies that both adopted and touted their Sans in late 1999 and this year as well. I seem to remember Ancor was involved with a large financial institution's San.
Pragmatists. "These companies are the herd. They see new technology as valuable, but only after standards have been set and systems have been thoroughly shaken out........When the herd does decide to go, it goes all at once, which creates a dramatic spike in growth or hypergrowth, what we call the tornado." My take here is that standards are still an issue but being addressed quickly and systems a la Qlgc total solution are being assembled. Its not necessary to put an ear to the ground, the herd is in the area, the fibre cowpokes are roundin em up but we need to brand em before them rustlers(ethernet, soip) get at em.
Conservatives. "These customers are much happier staying with the systems they have than switching to anything new- regardless of how much better it is supposed to be. Ultimately, when they do buy in, they act as latter-day followers of the pragmatist herd"... Lets hope we eventually get to these customers.
Skeptics. Ancient Greek philosophical movement that tried to weaken people's confidence in observation and reason as trustworthy guides to understanding the world. Modern voting guidelines are based on these principles.
This section on the technology adoption life cycle is followed by a five part section on high-tech market development that is a time-line overlay which corresponds, part to part, to the technology life cycle. The market development time-line is: Early Market, Chasm, Bowling Alley, Tornado, and Main Street(includes total assimilation).
The Early Market. "The first commercial activity around a discontinuous innovation is sponsored by visionary customers, supported by technology enthusiasts. A key characteristic of the early market is that it is based on large deals championed by highly placed executives in the companies buying the new technology." This time period is further described as a gestation period and not a source of significant revenue or profit. I think the San market is clearly past this stage.
The Chasm. "The chasm is a hiatus in market development during which there is no natural customer for the discontinuous innovation. It is the consequence of the polar opposition between the visionary, who is deliberately going ahead of the herd , and the pragmatist, who is just as intent on staying with the herd." Again, imho, the herd is in the area so we must have safely crossed the chasm. Early mainstream herd members, not visionaries, are adopting Sans. In a Nov 25th, 2000 JFeib post,http://www.siliconinvestor.com/readmsg.aspx?msgid=14877570&s=Survey, of 500 users, 30% had indicated they had implemented a San. This indicates an existing installed customer base.
The Bowling Alley. "The bowling alley represents the market penetration phase of the Technology Adoption Life Cycle. It is located at the frontier of the mainstream market, just the other side of the chasm, and represents niches of pragmatist customers who are willing to adopt a new technology ahead of the herd.....Specifically, bowling alley market segments typically build up around departmental function whose managers find themselves saddled with what we call a broken, mission-critical business process. These broken processes are jeopardizing the entire enterprise's ability to serve its customers." I don't know why the authors decided to use the bowling alley metaphor but it makes me hanker for a smoke and a beer(not really, just a beer). This is where I believe the San market currently resides, in the bowling alley. Further, this section of the book includes a VERY telling point: "Managers who are under this kind of broken-process pressure will sponsor a new technology ahead of the herd, (bold is mine)but only if the system provider can commit to an end-to-end solution to their problem. That is, to win over their target segments, each of these product vendors has to commit not just to providing an excellent product, but also to fielding a complete suite of products and services to solve the entire problem for the target segment. This leads them to recruit other companies that have the necessary competencies they lack, thereby forging a whole new value chain where none existed before. Once such a team is formed and the market has rallied around its solution, all other vendors get summarily excluded from the segment (pragmatists like to standardize on a single solution once they find one that works); so these first movers get to enjoy the fruits of market leadership for a long time to come." This point could induce some first-mover versus full solution first-mover discussion. Qlgc really stands out in the San vendor competition here! The authors go on to caution that some markets remain in the bowling alley forever and some proceed to a full tornado.
Tornado. "The tornado is a metaphor for the hypergrowth stage in technology markets caused when the buying resistance of the pragmatist herd finally caves in, and they rush to adopt the new technology en masse.....This action creates a mass market overnight-the entire herd in motion- thereby creating a severe inversion of supply and demand. This inversion, in turn, stimulates a tornado or hypergrowth-not untypically 300% per year in the very early going, slowing down to 100% per year over a longer period-as every supplier in the category seeks to ramp capacity to take advantage of this extraordinary state of affairs." Sans, in some form or other, seem destined to reach tornado status.
Main Street. "The tornado lasts only a few years, perhaps three to five, the time it takes for the initial surge of demand to be absorbed, after which the market reestablishes equilibrium with supply."
Comments welcome
Tam |
