tchen
New Member
There's a whole lot of bigger fish that are doing the verticals game (in hosting and out of it). Dunno why it's such an issue - in each of those cases the market is far bigger than the toe-dip that the 'solutions' subsidiary can handle. In almost all cases, they also don't undercut the existing market by any substantial margin.
In fact, the economics of it deteriorates the profit margin of the parent company. The main reason I come across points to it being instigated as a buffer to absorb excess supply in bad times. In good times, the subsidiary operates more independently and supplies itself from elsewhere too.
Source: analysis of other markets, mainly the solar-wafer manufacturing. I don't think the hosting industry is that unique.
In fact, the economics of it deteriorates the profit margin of the parent company. The main reason I come across points to it being instigated as a buffer to absorb excess supply in bad times. In good times, the subsidiary operates more independently and supplies itself from elsewhere too.
Source: analysis of other markets, mainly the solar-wafer manufacturing. I don't think the hosting industry is that unique.