|By Gregor Petri||
|December 28, 2012 05:00 AM EST||
Ecosystem could be "the word" of 2013, if only vendors, providers, ISVs and other technology conglomerates stop acting in a "This Town ain't big enough for the both of us" way.
As an App user* I am increasingly amazed, affected and annoyed by what in my view can only be described as turf wars between various technology providers. Increasingly cooperation - that originated by a desire to have a quick time to market - is being replaced by outright competition driven by a desire to own the full stack. Some recent examples:
- Phone manufacturers replacing perfectly good map applications with in-house brews*
- Search engines wanting to become social networks*
- Social networks* and web retailers* wanting to become advertising specialists
- Photo filtering apps opting out of 140 char event timelines* and v.v. event timeline apps adding photo filtering*
- Email providers abandoning the use of third party sync to enterprise messaging apps*
- Providers replacing third party music and movie services with in-house variants limited to their stack*
- Just about everyone adding their own inline chat and messaging functionality*
- Not to mention the various patent wars companies are waging, trying to block each other out of their home markets*
Now I am not against healthy competition (on the contrary) but as a consumer I fail to see how these developments are benefiting me. It seems many companies are answering the markets desire for integration by forcing consumers into their own, closed, single stack shops.
With cloud computing rapidly breaking down the walls between traditional industry segments, times are confusing for providers. Where we used to buy hardware and software form different vendors and solicited help - to get these two to work together - from yet a third category of providers, these demarcation lines are now rapidly blurring. Hardware and software are merging into services, while at the same time we see phones behaving like camera's, tablets behaving like PCs and TVs behaving like tablets. Naturally companies are worried about where in that blurring supply chain the largest profits will fall and as a result everyone seems determined to own the whole chain, wall to wall and soup to nuts.
But increasingly the limiting factor in market success is no longer the ability of providers to supply functionality, it is the capability of consumers to absorb functionality. Aan - at least at my age - once I mastered the science how to color my pictures, how to create a playlist, how to interact socially, how to access my email, etc., etc., I just want to be able to continue to do so, but in a seamlessly integrated fashion. I don't want to replace it with a new app, that does virtually the same, but in a different way.
Just a couple of years ago there was a lot of talk and enthusiasm about "Open Innovation", where companies could make the market pie bigger by working together (instead of fighting over who got what piece of the existing pie). To some extend it is the old "single vendor" versus "best of breed" dilemma, do I concentrate on having a good enough homogeneous product that does it all, or do I focus on building the best product for my functional area and work/integrate closely with others (at the risk their area turns out to be more profitable (in market speak: has a better business model)). In other words do I go integrated/closed/proprietary or more interoperable/open/standard.
My believe (or at least my hope) is that companies that act more from the perspective of consumers/customers, than from their own financial/shareholder perspective, will eventually come out better. Note however that in this context it is very important to understand exactly who the customer is: is it the user buying access to the service or the advertiser buying access to the user (in which case the user is merely the product being sold). If the app economy is to continue to grow, it will need to increasingly address the primary customer (the users). And if (granted, a big if) the market is a bit like me , it will prefer ecosystems of leading open apps over fully integrated closed stacks.
Traditionally, before the current trend towards exclusion instead of collaboration took hold, the silicon valley pressure cooker was the center of such collaboration. Maybe Europe - being a collaborative environment by nature - can step into its place and use this as much needed differentiator against the increasingly mega-large, mega-integrated and mega-closed conglomerates from Asia and North America.
SaaS companies can greatly expand revenue potential by pushing beyond their own borders. The challenge is how to do this without degrading service quality. In his session at 18th Cloud Expo, Adam Rogers, Managing Director at Anexia, discussed how IaaS providers with a global presence and both virtual and dedicated infrastructure can help companies expand their service footprint with low “go-to-market” costs.
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