If your whole business relies on staying in step with giant competitors with huge piles of money thrown off from other successful ventures to lower their costs and prices more aggressively then you can, it's going to be an ugly business in the long haul.
Price is a terrible competitive advantage because unless you have a revolutionary cost structure to go with it, you're hosed once someone does something reckless, like lowering below cost to drive you out of business.
Google and Amazon aren't going anywhere because they own search and ecommerce. Hosting and infrastructure are nice businesses for both companies, but they are fine without it. Rackspace without hosting and infrastructure revenue is not a company.
Comments
If your whole business relies on staying in step with giant competitors with huge piles of money thrown off from other successful ventures to lower their costs and prices more aggressively then you can, it's going to be an ugly business in the long haul.
Price is a terrible competitive advantage because unless you have a revolutionary cost structure to go with it, you're hosed once someone does something reckless, like lowering below cost to drive you out of business.
Google and Amazon aren't going anywhere because they own search and ecommerce. Hosting and infrastructure are nice businesses for both companies, but they are fine without it. Rackspace without hosting and infrastructure revenue is not a company.