friday-rant
Business Management

Rant: The myth of the one-stop shop

They’re at it again. Dell wants to buy EMC in a record-breaking transaction with the justification that companies don’t want to buy “silo” products. This is a thin premise indeed.

To be fair to Michael Dell he didn’t use the corny phrase itself but he was once again talking about that old red herring the “one-stop shop”. Buy a lot of stuff from one vendor, goes the argument and you won’t have to worry nearly so much about integration.

There’s a certain amount of truth in this: products that are pre-tooled to work together stand a better chance of doing so than those lashed together with chewing gum and string, even if “open systems” (ho ho) have been touted for about 30 years now.

But the catch with the one-stop shop is that very often you’re left with suboptimal products and a good chance of being locked in to a single supplier (see ‘IBM, early days of’) that becomes more interested in milking revenue than innovating.

The one-stop shop is often likened to a supermarket possessing a wide range of goods conveniently located in one place and passing on economies of scale. Supermarkets have enjoyed a remarkable rise over the last few decades but it’s notable that there has also recently been a revival in specialist shops and artisan goods. This latter category represents the opposite of the one-stop shop, the ‘best of breed’, even if the metaphor is horribly mixed.

Despite IT now being half-a-century old, best-of-breed continues to prosper and we have a healthy IPO market. Indeed, many of our most spectacular success stories in tech today, such as Google and Amazon, are relative newcomers that stand apart from the giants and often beat them. Security, database and datacentre markets are in turmoil thanks to startups that do one thing well.

For years, decades even, pundits predicted that IT will shrink down to a few dominant players. But the rate of innovation has meant precisely the opposite: a whirligig of young companies that discomfort incumbents. Dell and EMC might well work and many large companies like to work with peers, but the idea of collating SKUs and expecting sales to follow is a proven fallacy.

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Torquemada

Torquemada, not his real name, has been casting a jaundiced eye on the technology world since the Sinclair C5 was causing as much excitement as the driverless car today, a 64K RAM pack could turbocharge performance, and Alan Sugar was the equivalent of Elon Musk.

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