10.03.05
Segmentation
Recently, several people approached me and asked how much VCs invested in a particular space. The issue here is less about the investment amount, more on the space definition. As technology evolves, traditional technology boundary is blurring and vendor coverages are overlapping. Customers no longer want to tolerate multiple single point technology, they want a single solution. A good example is management. Traditionally, in the network management, each of the FCAPS (fault, configuration, accounting, performance, security) domain is segmented out and tends to have vendors concentrate on a sigle domain. But today, a customer would not want to purchase from separate vendors, they want one vendor to provide all and integrate them together. Maybe it is just 80% of the solution, but 80% solution is good enough and would cut OPEX cost down dramatically. So the vendors tend shift focus over time and provide more coverage in order to maintain that customer. Now the interesting question is about how to define a vendor, especially a startup correctly: for example, is it a security vendor providing management solution or a management vendor providing security solution? Should the vendor be classified under security or under management? Now bring it up one more level and compound the network management with other layers: OS, server, storage, application, users etc, the classification becomes a major endeavor. My suggestion to that rather than define a generic space, let’s start with a customer problem. Using that to drive is much clearer than using a category defined by an analyst…
