Mike--
impossible for the #2 vendor to take over the lead without the winds of a tornado
Don will need to chip in here with respect to BEA, but can you have a gorilla by default? Simply because an economic slowdown quiets a tornado? For certain, BEA is the dominant force in the app server market. It doesn't play in any other markets, while an IBM, a SUNW, or an Oracle have to protect their primary markets in any downturn.
interpretation seems plausible
If I remember correctly, it is also one that Tom Siebel used in the quarterly cc before last. In downturns, the weak fold or are acquired and even the strong tend to their real knitting--which consolidates power in the hands of the focused leader. (At the time, I took this as a swipe at Ellison, but it may have broader implications.)
Reading between the lines, Siebel was implying that despite revenue and margin pressures, this consolidation would produce share and eventually an upswing in margins and revenues.
Even though the authors don't directly discuss the impact of economic conditions on tornados [or hurricanes] in GG, there is an indirect inference. Since gorillas can only be displaced by a disruptive technology, downturns that affect tornados may in the short term [getting pretty elastic here on definition of short] impact their stock price but not their power. In some cases, somewhat counter-intuitively, the lull in the tornado may actually work to enhance a gorilla's clout. Competing disruptive technologies are not likely to be funded or if in the hands of smaller players can be acquired at bargain-basement prices.
It would be really helpful for Moore and company to put the recent events into a historical context. This whole issue was quite thorny in coming to terms with BEA--where forces quite apart from its own dynamic were and are, I think, tempering the tornado.
--Judith |
