can you innovate a commodity?

June 24, 2008 at 9:05 am | Posted in Business, Technology Trends | 4 Comments
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Yesterday I talked about Seth Godin’s comments regarding that you are only a commodity by choice.

Tony then had a nice comment, where he ended with this question:

Can you have a successful product strategy in which you don’t innovate but instead just force the commoditization of your competitor’s products? Probably, but who wants to be there?

I think the answer is that a lot of companies want to be there. In fact, I think MySQL has exactly one billion reasons to be happy about being there! 😉 Which brings me to this post.

If you talked to MySQL, they would argue that they are, in fact, an innovation company. They would say that their pluggable table engines and their MySQL cluster are just a few of the ways they have innovated the RDBMS landscape. But, I don’t agree. Would they be where they are if they charged for their database from the outset? Doubtful.

So the question is…. was the fact that they carved out a commodity niche in the ancient (by technology standards) RBDMS market, in and of itself, an “innovative” approach? Did they engineer things differently to allow that model to work? Why didn’t PostgreSQL (who was there first, and was free, and was open source, and had more features) win that battle? Did MySQL do some “innovation” of the entire process (not just the technology) that allowed them to succeed after coming a bit late to the game with less features?

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  1. I agree with your comment relating to MySQL technology, and the entire RDBMS market being commoditized. The vendors try to sell it based on their innovations but to date there haven’t been any major game changers since its inception.

    So re your original question, “can you innovate a commodity?”. Well it appears so, but that seems to work to get you into the commodity market (which by nature is a hard nut to crack), but once you are there you are still in the position of trying to pitch a similar product as everyone else.

    MySQL is now a player in the RDBMS market, but now what? Gain market share by continuing being free? They hit a bit of a wall on this with enterprises saying that the free bit is nice, but what they really want is support and a vendor they can nail to the wall if their database turns to mush. So now they are becoming less free to trying and to gain the competitive advantages that Oracle and Microsoft etc have. They still have market share they can gain off the big boys, but this is now going to be a slower and more difficult gain.

    MS forced the commoditization of the browser market, and at the same time took the market share very quickly by making IE a good browser and free. But guess what, FireFox are now making a good (to some people better) browser that is free too and are gaining their market share.

    So I think my point is, innovation in the positioning of a commodity is valuable and if you do it well if can quickly get a bigger piece of the pie, but doesn’t change the fact that what you are offering is still a commodity and once the dust has settled you are going to still be playing the same game as everyone else.

  2. you bring up a good point — What’s the end game? If it was monetary, then MySQL is a resounding success. If it was innovation, I think they get a low grade.

    Where do they go now? Not sure, but my guess is their future home is in the cloud.

  3. From ComputerWorld:

    “We aren’t ready to make any new announcements at this time, but it’s an area that’s being evaluated as we integrate with Sun Microsystems,” MySQL vice-president of marketing, Zack Urlocker wrote in an e-mail. But he added, tantalizingly, “Sun certainly has the expertise in massive scale and cloud computing that could make for an interesting story.”

    Out of all the mainstream vendors (which I guess MySQL/Sun is now one) I think SAAS fits their current market best (developers, Web 2.0, non core apps, web). Already Amazon, Google and shortly Microsoft with SQL Server Data Services are off the mark here (and a bunch of others). For the time being they are all going to be chasing the same piece of the niche pie, but the longer term implications in terms of the RDBMS’s bread and butter, the enterprise, need to be explored.

  4. I agree. Tony, would love to see something from you on cloud/nextgen databases. If you do, will definitely link to it from here.

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