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Giving the Business to Extraneous Business Units

Have you ever wondered why vendors are so quick to set up trendy business units, whether they be for virtualization, client/server computing, Linux or some other happening-now technology?

Dan Kusnetzky of Virtually Speaking was taking note of Red Hat's new cloud business unit. It got him thinking and he came up with four good reasons for this latest outbreak of me-too-itis:

Some of these firms do it for appearances. They want the world to think they are staying on the cutting edge, being very innovative, etc. "In truth," Kusnetzky, opines, "many are really just renaming something to use the current catch phrase or buzzword."

Other vendors just want to bring together a bunch of smart people with advanced technical knowledge in a single area in the hope that they will do good stuff, like devising better products, services and go-to-market strategies. Kusnetzky says of this clustering approach, "There are cases, however, in which this appears to be merely an attempt to rearrange the deck chairs on the Titanic rather than truly innovative thinking."

Then there are those lightweight suppliers that simply want to be seen as part of the scene. Kusnetzky says this see-through strategy "allows them to say 'me too!' and be believed for a time."

Concluding, he proffers the following description of his final category, saying of their reason for creating a new business unit: "It gives them an attachment point or pressure-equalizing docking bay so that when they purchase smaller suppliers the employees don't jump ship due to vast cultural differences that may exist between the acquired company or companies and the 'mothership.'"

You have no doubt run across more than one company that fits one of these four descriptions. My question is, why do they bother? Let me know by sending me an e-mail.

Posted by Bruce Hoard on 03/08/2010 at 12:48 PM


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