The topic of how the existing large hardware and software vendors innovate for new products has been on my mind for a while now. I don’t claim to be an expert in this topic, but I see new companies kicking the ass of many of these companies with better products. This only seems to becoming a larger issue, and large enterprise keeps trying to keep up by purchasing companies for their product or patents. Sometimes they make the wrong choice, over pay or are just too late.
Lets take a look at a couple of the more successful storage statups recently. Both Tintri and Nutanix have managed to create products that are ground breaking for virtualization and performance. They created these products from nothing more than an idea and hard work. They did not need billions of dollars to get going. they took 17M and 13M respectively as their first rounds of funding. There was money invested prior to this from the founders that is not public but we are not talking crazy money. The point is these companies and others manage to create something great when left to their own.
A little time on Google presented the following details. I found that EMC will spend in the area of 2.8B on R&D this year, and HP will spend over 3B on R&D this year. I know these are large companies and they have many product lines, but why do they keep getting beat by many startups for innovation? These two companies were just an easy example, you could easily make the same case for every large storage and server vendor and many software companies.
Some recent good examples is how Cisco has done some of their spin-in projects and what VMware recently did with their EVO:RAIL solution. These vendors took a project team and let them work on their solution without the interruptions, politics or dead weight of the company and they managed to create some great products. Why are not more vendors doing this?
I know there are smart people at these companies. What is to stop them from identifying internal talent or hiring new talent, and then taking some of that muli-billion dollar budget and funding some internal startup teams? These new teams could bring the type of innovation that we usually only see from small startups.