Coping In a Flat World
by Hu Yoshida on Aug 5, 2006
"The World Is Flat" by T. L. Friedman has been out for some time but I never took the time to read it since I thought it stated the obvious. With the Internet, high speed communications, globalization, the old barriers were gone. Also since it runs to 590 pages, it was not the type of book I would like to carry in my briefcase for light reading.
However, on my flight to Malaysia this week, I finally found the time to read it and found it very interesting, especially the chapter on "How Companies Cope". In this chapter Friedman gives 6 rules for corporate success in a Flat World. Rule number 4: "The best companies are the best Collaborators" He goes on to say that the next layers of value creation are becoming so complex that no one company can master them alone. In other words it would be better to collaborate with other companies rather than buying them, especially if it is outside your core competence.
That was good to see in print. Not too long ago, HDS was being criticized by many analysts for not buying other companies and transforming our business like so many of our competitors. We were viewed as just a storage company, a business that was being commoditized.
HDS believed that we needed to build on our core competence of storage and data services, and work through partnerships and collaboration to grow our business. At that time we articulated our True North Strategy which was based on Intelligent storage Systems, Open Management Framework, and a Collaborative Business Model.
We delivered a scalable storage architecture that could be optimized to meet changing storage requirements. Based on SMI-S, common protocols like FCS, ESCON, NFS, etc, and a collaborative business model we could easily work with others to meet specific customer data requirements. We even took collaboration to the extent that customers could attach other vendor’s storage to our intelligent control units and utilize the functionality of our system without buying HDS storage.
Although, we had not read Friedman’s book before, we seem to be in sync with his views of what companies need to do to cope in a "Flat World".
I recommend that you give it a read. See if you agree with the other 5 rules for how companies cope.
Comments (3 )
I’ve never read the book but I like the thought. I think it’s a principle that can be applied in so many areas of life. If you want the job doing properly get the right people in to do it – if you have a sick child you want people who’s “core competence” and dare I say passion is caring for sick children and the same runs true for so many areas of life.
However, I cant help but feel that in today’s world where everything seems to be built by the lowest bidder with the cheapest parts that a strategy like this might not work.
I recently blogged about this on Snigs blogsite (blogs.rupturedmonkey.com) in a blog titled “Big Blue…Big Borg” where I talked about whether companies who specialise on a core competence, as you have put it, can remain competitive.
If a competitor can come in and sell a storage array and also bundle its own VTL solution or ILM…… and hide the cost of the array behind the costs of the VTL and ILM how can others compete? Is this not what happened when IBM made both the mainframe hardware and the software and Hitachi made only the hardware? How could Hitachi compete with IBM when IBM could almost give away the hardware and make it up in the cost of the software?
In a world where profits and share holder dividends reign supreme I wonder if this strategy will work? I for one hope it can.
Here are only several reasons to buy third party products from one company:
1. Support from one point.
2. Possibility to buy products, which are not presented on the local market.
In my case HBAs and switches came from HDS, not from OEMs. And so? I couldn’t download firmware for switches from producer’s web site and I have to call support to deliver every new version.
I see no reasons why to buy HDS storages from Sun or HP software from HDS. But it’s reasonable for me to buy VTL or Content Archive solution from HDS because OEMs are not presented on the local market (small country – small market – only big companies like HP and IBM).
What’s your “core competence” – make new software and hardware or integrate existing products?
One more question regarding collaboration… What is position of NetApp products since HDS presented its own NAS gateway? What about support of NetApp products already sold through HDS? What about investment protection? I don’t believe in partnership and collaboration between competitors.