Cannibalization is a harsh term when it comes to tech companies. With technology moving at such a rapid pace, cannibalization is a reality that a company must face, sometimes in order to survive.

“Cannibalization” is the strategic research, development and release of a product or service that may take away from an existing product or service that a company already sells.

Back in the early days of “Ma Bell” (short for “Mother Bell” aka, Bell Systems) there was no competition. It did what it wanted whenever it wanted. Not only was there no competition, there wasn’t anything that “Ma Bell” was doing to hurt their own “bread and butter”… their Telephone Business.

This went unchallenged for many years. Until 1984 when “Ma Bell” was broken up into 8 different smaller companies such as, AT&T, Bell Atlantic, NYNEX, etc. I am sure this was painful for those who had benefited from the “Ma Bell” empire, but as we look back, it spurred competition as well as innovation.

The breakup of “Ma Bell” created the “Baby Bells” which has diversified into wireless technology, IP telephony, Internet service provider and even cable television service.

Cannibalization became an essential part of survival. It providing forward movement of technology for the industry and for us… the consumer.

On the other hand, a sad example of a company that was adverse to cannibalization was StorageTek. StorageTek was formed by 4 former IBM engineers in the early 70s. They developed tape libraries and tape backup devices. They rode the “gravy train” for many years and made lots of money. Competition was easy since they owned many patents around tape library robotics and design. StorageTek was way beyond any other competitor and put to shame virtually all other tape library companies. There was an unlikely competitor that didn’t even make or designed tape drives or libraries. They didn’t even have robotics. It was a software company that made disk storage arrays that started the downfall of StorageTek.

The company was EMC. EMC, a software disk array company developed and mass marketed the first successful VTL (virtual tape library). StorageTek was unable to develop and launch to the mass market a VTL mainly in part because of the resistance to cannibalization. Fortunately, StorageTek was acquired by Sun Micosystems and now a part of Oracle. StorageTek’s robotic technology is still used in other applications and is still selling tape libraries. Just not like they used to.

As we look at companies today, cannibalization is a natural part of moving forward, but it needs to be done gracefully and must be strategically timed. For example, Apple does this with grace, keeping ever consumer on his heals waiting on long lines as if our lives depended on it. The release of the iPad mini will indeed cannibalize iPad sales, but Apple strategically holds back certain features like the retina screen. This strategic limiting features and marketing of the iPad mini actually counters other 7″ tablets. This comes at the optimal time when people are holiday shopping and people are perhaps tired of their 7″ kindles or 7″galaxy tablets, what a great excuse to jump onto the Apple bandwagon. They can do this while not giving up the footprint they are so used to.

Cannibalization is now a tool to move forward instead of looking for an exit strategy.