Data Vast INC: The Target Segment Decision Harvard Case Solution & Analysis

Q1) Describe the data storage industry in China in this case.  Include comments on technology and issues in accepting new technology?

The data storage industry in China is not highly competitive. Depending upon the device, some old methods for backing up data are still in the maturity phase such as Compact Disc, integrated systems, and some new methods like cloud storage is in the introductory phase.

The industry is not very huge itself, it is estimated that nearly 60% of the Chinese corporations use devices to back up their data, and even in those 60%, a significant proportion of companies use obsolete method to store their own data. This leaves the market open for new comers in this business, and it provides an opportunity and equally it poses athreat of potential entrant in this business to occupy the market.

There are several technological methods of storing data used by different vendors and organizations within China.This highly depends on what scale the data needs to be stored and by whom. Most of the storage devices, which cost cheap to consumer market are very exposed to the risk of security and damage of data whereas,those devices that are expensive cover the security issues to the level of satisfaction.

Occupying the vacant space in this market as a potential entrant is not easy at all;as there are several risks that need to be focused upon. Firstly, there is a high risk in the market of theft and selling the information of companies,which is confidential and private information regarding local citizens.Due to this, there is a lack of trust between industry entrepreneurs and customers.The peopleusually avoid the products, which could hurt their private lives.

Secondly, the cost associated with new technologies of storing data is very high, due to the few companies in the market; it is highly price sensitive because of monopolistic competition. People mainly use obsolete methods like compact discs to store their data because of the low cost and they are forced sometimes to sacrifice the security of their data.

Another important point is that people do not usually accept changes rapidly with regards to data storing technology in china. This is because the laws are underdeveloped and are not amended or added in response to updated and new technology, which is why the market in this sector is saturated due to high systematic risks.

Due to the increased data leakages in recent years, people have become very cautious in the approach of choosing storage device for their data to an appropriate level of security that can be provided. Overall,people lack the knowledge of technological changes in this industry, that’s why the Chinese data storage industry struggles. However, a considerable amount of interest is shown if a product is sold to them if it guarantees at least data security and alternative back up options.

Q2) Compare the buying practices of small companies versus large companies with respect to backup technology

The two market segments of this industry, Small medium enterprises (SME’s) and large companies differ from each other in terms of buying a suitable data backup device or service and also in terms of operational needs.

Large Companies

Large companies due to their size and complexity usually buy costly products, which cannot be easily hacked due to limited interface can only be understood by the personnel of the company. Large companies also buy off the shelf products (ready made software’s and hardware’s) and integrate them in such a way that it can be incorporated in business as it demands. System integrators in the industry do this heavy job for large companies.

Similarly, their demand for backup storage is huge and also the need of data backup service or device which cannot be easily decrypted by anyone in case of leakage or theft of data. This type of security is of high level and needs considerable amount of money to be invested to ensure such security that even a hacker cannot be able to exploit the data.

This is why large companies mostly purchase from system integrators and pay heavy cash and ensure good relationships with these system integrators for the security and maintenance of data in the long term. Even at the time of buying the product, they consult with these integrators to ensure high security protocols of data.......................

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