People Buy Holes, Not Drills!

Added 08 March 2016

People Buy Holes, Not Drills!

It was bewildering, hilarious and finally exasperating to sit through a day full of 25 presentations by a technology company’s sales and marketing folks, without a single mention of a customer’s true need or pain area. This was a storage company, and the components were dissected and discussed in detail – controllers, cables, and host bus adapters, associated with three or more disks, located outside of or within a server cabinet and the average cost of the disk storage systems with and without infrastructure storage hardware (i.e. switches) and non-bundled storage software. Then there were Exabytes, Terabytes, $/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criterion duly segmented by location, installation base, operating system, vendor, family, model, and region. Phew!

They moved on to a discussion on which company has the largest share in which product class. All market sizes are well-defined and dangerously finite, fitting neatly into pie charts. Markets for Big Data architectures, AFA Vendors, data lakes/hubs, hybrid arrays, cloud Tiering, tier-2 storage and software-driven storage solutions were discussed thread-bare. The storage business is about 20-23% of the global IT revenues, and sounds so complicated. Do we really want to know all this? How does it matter?

The entire 10 hours spent by 25 people in the room that day seemed utterly pointless. Here is why.

Let us get to fundamentals here. What is a market? A market is a conglomerate of reference-able customers. The customers are NOT reference-able because they use identical products or comparable brands. Customers in a market are called reference-able to each other when they have identical or similar needs that could be fulfilled by very different products. Labeling markets by product or service categories is hence a dangerous mistake, a fallacy.

Theodore Levitt, the most sublime thinker in Marketing, simply says “People buy ¼” holes, NOT ¼” drills.”

Onions do not have a market. Pungency in certain foods is a market need, and hence, pungency is a market. If onions were never discovered, pungency would still be a basic need in cuisines across the world. There is nothing on earth called the computer storage market. In a quick check with a few buyers/users on why they need storage, it emerged that there are multiple markets (also called customer needs) for computer storage:

  1. Fear of losing data
  2. Data at multiple locations
  3. Too much data, growing too fast
  4. All data on tap
  5. Key data, authorized access
  6. Quick retrieval of any data
  7. Resilience in data storage and retrieval
  8. Intelligent ways to get any information anybody wants
  9. All data pertaining to a business process
  10. Any combination of some or all of the above.

Customer: “We don’t know if we need a drill, a good drill, your company’s drill or a better drill. We just need to feel good about having that picture on the wall.”

What is described here happened to happen at a storage company. This situation and such meetings are repeatedly and unapologetically happening across every major technology product/service company. All their conversations in the market probably start with, “We have storage. Do you need any? Have you got any already? Are you planning to buy more? We have some new exciting stuff. Want to hear about them?”

Theodore Levitt, the man who coined the phrase “Marketing Myopia”, would certainly have frowned at the myopia underlying the nomenclatures “Data Storage Industry” and “IT Industry”. Levitt goes on to warn us that the demand for drills may go away, but the demand for holes never will. In technology, we will do well to focus on the holes, and not get so enamored by the drills.

Georges Pompidou, the man who was first the Prime Minister and then President of France during 60s and 70s, is famous for these insightful words (suitably modified for political correctness):

“There are three roads to ruin; agriculture, gambling and technicians. The slowest is with farming, the quickest is with gambling, but the surest is with technicians.”


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