Coté Memo #082: Disrupting with high prices, indulging in colonialism porn, and dying among the tomatoes. Oh, and Docker!

Come to the Austin Docker Meetup this Thursday (Jan 7th) to see me and some much smarter people talk about “The Container State of the Union.” See below for some of the “prep” work I’ve done. Also in this edition, new types of disruption theory, compliance in DevOps, books, and a smalll, interesting link round-up.

Tech & Work World

Resetting Prices

Disruption theory follows a template: a new competitor starts with an inferior product at a lower price, finds success, and eventually takes over the market from the leaders. “Inferior” here means less features, capabilities: something that’s less appealing. At least that’s the interpretation that seems to win every 2–3 years when a big debate about disruption vs. Disruption comes up.

As an example, you can see some advice on how FitBit can win against Apple:

Zino, who maintained a “hold” rating on Fitbit shares, said the company should focus on products that cost less than $100 and have an intense focus on wellness.

A FitBit watch would be cheaper and less featureful than an Apple Watch. And that brings up the interesting point, as it’s the Apple Watch that’s “disrupting” FitBit, Jawbone, and all the others.

There’s a clutch of companies now-a-days that use high-end offerings to suck up market-share from low-end competitors, Apple being the chief among them. In this model, you start with a more expensive, usually more featureful offering (though not always, sometimes it has less features in the name of design elegance!) and, more often than not, don’t really lower your prices much. Instead, you seem to “rescue” lower price expectations, “resetting” the price. iOS devices are an example here, of course, but I think the pricing of other things - like public cloud and SaaS, depending on how you slice it up - are good examples as well.

You can see Uber doing the same (they started off as a black car service, after all). If you’ll pardon my lazy-lack of researching, it feels like there are others who do this: my own company, Pivotal, arguably is doing this in the application development space (our products are far from cheap, but we’re capturing a lot of market-share).

Let’s look at Apple more as an example: all their hardware is much more expensive than alternatives, and sometimes even has less features! That’s confounding in itself. There are times when Apple is more expensive and has more features, e.g.: the Apple Watch definitely has more features than a FitBit or an analog wrist watch. Again, Uber is an interesting example: they started at the high-end and are now going down-market. Maybe Silver Car is in the same bucket.

I’m not suggesting this cancels out Disruption theory at all, but like the Exponent.fm boys often suggest, it seems like there’s a different type of disruption on the rise that isn’t talked about enough.

You can do all sorts of business theory gymnastics to re-define the job to be done to make Disruption theory work. Horace Dediu did this very well, long ago, in his analysis of the iPhone: it’s category was the PC, not the mobile phone which brought with it some of my favorite charts ever (see an updated version of the concept that better highlights the amazing growth of iOS).

Along those lines, usually, the cult of “big d” Disruption shuffles this type of “beyond Disruption” thinking off as “sustaining innovation,” which just means the industry improving their existing offerings and businesses. I’m sure that’s often the case, but I keep thinking there’s a new model in there somewhere.

On the other hand, I get the feeling that if I had some actual numbers and 3–5 other industries to look through, all of this would seem kind of silly. Another good trick is to look at market-share/revenue vs. profit. Again, Apple is instructive here: they may not always take all the revenue, but they seem to dominate in profit. It’d be interesting to run this kind of thinking versus Amazon Web Services and the trail of dead that have tried to compete with it. I have no idea what kind of business theory explains all that.

Dealing with compliance in DevOps

For my column last month-lyish, I wrote up some tips for dealing compliance and audit people when you’re “doing the DevOps.”. These things really apply to any type of cloud-enabled IT, mostly. As ever, I think the main points are: if you talk with people more and really understand what they need, then go understand your tools and what you can do with them, most things are achievable.

Check it out, I’m curious to hear how you deal with this stuff. It comes up all the time, and the answers are usually not very concrete.

Container State of the Union

I was asked to be on a panel this week for the Austin Docker meetup: it’s this Thursday, Jan 7th, 6pm, at the Rackspace Austin offices. My role here - other than trying not to shill too much for Pivotal - is to be a pretend industry analyst…I think. You may recall I tried to sort out WTF “container orchestration” was back in 2014 with CloudSoft. That’s pretty much what I’ll have to do; as dedicated readers no, I have no idea what I’m doing…but I can PowerPoint the shit out of any unknown!

Speaking of, here’s some fun-facts I’ve gathered so I can hopefully shuffle through some big, blue index cards like a nervous person:

• Above, my old colleagues at 451 (Jay and Donnie) have a good way of looking at container adoption: 21% of surveyed people are doing something with Docker, 6.3% in production. That’s n=991 from their 1Q2015 Voice of the Customer research.

• Run on 6% of the hosts DataDog monitors, n=7,000. “At companies that adopt Docker, containers have an average lifespan of 3 days, while across all companies, traditional and cloud-based VMs have an average lifespan of 12 days.” (DataDog, Fall 2015.)

• Earlier in the year, New Relic said that the average life-span was 3 minutes, across 300 customers “using an aggregate of 40,000 to 60,000 containers daily.”

• Anecdotally, in most all of the customer visits I go on or hear about, Docker is on the short list of things to look into. Obviously, companies don’t always end-up picking it by far (451 only had production use at 6.5% above…but plenty of experimentation): Pivotal Cloud Foundry had a run-rate of $100m/year based on 2015Q3 numbers, so plenty of cash in this small market is going to alternatives. We’ll see how it pans out.

Anyhow, come check it out the panel if you’re in the area!

Shameless Self-promotion

• Check out one of my newer stump speeches for work, “Cloud Native Promises in the Land of Continuously Delivered Microservices,” recorded at the Gartner AADI conference in December. Adam Bloom has a nice write-up of it, or see the slides, or video. Thanks to Andrew Shafer for coming up with the abstract and doing much of the story boarding and solutioneering for it.

• Meanwhile, all the recordings for my Cloud Native Journey webinar series are up, including the most recent one on IT department transformation. For more, see a full list of them, with links to slides and recordings.

• Our audience is not shooting up in the closet,Software Defined Talk #51 - I really enjoyed recording the last episode of the year. Check it out.

Books

Over the Christmas break, I finished up some books…and started new ones:

• The End of Competitive Advantage, by Rita McGrath - Referenced occasionally on Exponent.fm, this was pretty good. I haven’t gone and read the HBR article to see if it follows my genera theory of business books (the article is good enough, no need for a full book). I think she does a good job outlining the idea of “transient advantage,” something I started incorporating into my prattle last month. An anecdote about her dad made me type about about my own dad’s life in the tech industry.

• Following Muhammad - After reading this moving (even for a lower-case atheist like me) piece on Quartz, I realized I didn’t really know or understand much about Islam historically or contemporaneously. This book didn’t really help out with that, except to pummel the point home: religion is people, lots, and lots of different people with different ideas, and different histories, so, like any piece of human craft and art,what sense can you expect to make of it other than experiencing it as flow?

• Though Hemingway doesn’t list him as a must read, for some reason I got it in my head that I should read more Conrad, so here I am in the first novel, Almayer’s Folly. Paired with the evisceration of colonialism in Following Muhammad, reading Conrad almost seems like reading porn. So far I’m getting exactly what I was hoping for: that weird, dank, sometimes foggy narration that you’d expect from the progenitor of Apocalypse Now.

Quick Hits

A lot of time has passed since the last memo, so there’s more links than this. As always, follow my links in Pinboard or Tumblr if you want more real-time junk to read:

• Oracle promises ‘next-gen’ Texas cloud campus - “Oracle will expand its existing headcount in the city of 1,500 by more than half with the development, it said, although it seems staff will mostly be on the sales side.”

• CarPlay finally coming to Ford cars this year, including upgrades for last year’s models - connected car and all that. Sadly, my Ford is a 2013. I’d love some better iOS integration up in there. Computers, am I right?

• Our Future of Private Cloud - YouTube - “The dedicated cluster is dead” - that’s pretty good.

• Is the future of wealth management going to be robo-advisers? - Estimate of the market-size for companies like Wealthfront: “whilst in the UK robo-advisers currently only cover less than £1 billion assets under management, the US robo-advisory market handled $19 billion AUM in 2014 (a growth of 65% from the previous eight months).”

• IBM’s Steve Mills retires - 40 years at IBM, straight out of college. He built up the software group, then ended up managing hardware was well: the article says he was running $40bn of business for IBM. Also, he was an awesome interlocutor at analyst events: a fun character on the drama of the IT industry!

• Nokia aims to hit it big in broadband - “The Finnish tech firm gained control of French telecom Alcatel-Lucent on Monday after France’s stock market regulator approved a 15.6 billion euro ($17 billion) deal, first announced in April.”

Fun & IRL

“Cease to React At All”

If you are willing to look at another person’s behavior toward you as a reflection of the state of their relationship with themselves rather than a statement about your value as a person, then you will, over a period of time cease to react at all.
-Yogi Bhajan

When I was studying Eastern philosophy in college, I had a strange relationship to Buddhism, Taoism, and all that. It seemed like giving up so much and disengaging with the world. The idea that the ultimate idea was not Logo-atic truth, but “nothing” seemed weird.

Now that I barely have time to contemplate what “nothing” even means, I value the idea of letting go a lot more. Somewhere between becoming self-less, table flipping, getting the kids ready for school, a fine bottle of bourbon and steaks at home with family, Vito Corleone dying in the tomatoes, watching the tech industry, and Courtney Barnett on repeat…is a pretty good place.

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