The Kid Gloves Are Coming Off In The Data World

It's time to reposition or take over your category

For several years, many data companies were very friendly with each other. Competitors even held events together or attempted to grow new categories. But somewhere late in 2021, companies started to go on the offensive.

As companies' budgets started to tighten in 2022, it felt like it got worse.

Now in 2023, various vendors and solutions are fighting for position. They are repositioning themselves via pricing in hopes of securing different customer sizes, or they’re trying to undercut their competitors entirely. 

The kid gloves are off, and products can no longer afford to be polite. 

In this article I wanted to explore a few examples of how companies are trying to grow, or maintain control of their space.

Internet Explorer, Microsoft Teams and Now Fivetran

In one of my final courses for my information systems degree, my class was broken up into teams and required to run a business simulation. Each group was a different company, and every week we had to decide on how we wanted to price, where we wanted to invest, etc.

Our grades literally depended on how well we performed compared to our peers. Now at the time, this was far too high-level for many of us (or at least me) to tangibly connect into real life.

But, after actually having work experience, at least some dots are connecting.

For example, let’s talk about offering a free tier or service.

When a company begins offering a free tier, it’s rarely out of the goodness of its heart. It’s generally to start forcing competitors out or forcing them into taking significant losses on their product, a loss that would likely put the competitor out of business.

One company that has utilized this strategy over and over again is Microsoft. Whether it be destroying Netscape or eating Slack’s lunch, Microsoft has been able to constantly fast follow behind successful products and take over a space. 

I’d also add this is also due to far better distribution and price obfuscating through bundling in terms of Microsoft Teams.

Well, now it’s Fivetran’s turn.

Fivetran recently started to offer a free tier. In this tier, both current and new customers can be included in a free tier without adding credit card information as long as they are using no more than 500,000 monthly active rows.

Now, if only they’d stop automatically trying to set up sales meetings with me just because I established a test account.

As pointed out earlier, companies generally don’t provide free offerings because they are altruistic. No, it's typically to put pressure on their competitors. It makes sense, of course. The data integration space continues to invite competitors (and already has quite a few). So why not make the space a little more of a red ocean?

I have already had several discussions with companies looking to reposition, change messaging, or follow behind Fivetran’s free offering. If all they are offering is a similar solution to Fivetran, then it’s hard to beat free, especially now when everyone is talking about cutting costs.

It only makes sense for Fivetran to offer a free tier and further secure more market share. It’s just them striking while the iron is hot. There is an opportunity to crowd out their competitors, so why wouldn’t they?

Just a sign of the times.