BoingBoing notes that consultants are advising telecommunications carriers to further clamp down on their networks lest any 3rd parties tag along on their typically proprietary networks. What?!
Carriers should be leveraging their networks more not less. This sounds like the classic entrepreneur's dilemma -- you try and do it all yourself (The E-Myth) whereas most successful entrepreneurs don't go it alone. Leverage other people's money, leverage other's talent, leverage other's creativity, leverage other's contributions, leverage other's own networks. The do-it-yourself model doesn't work for "digital" products.
One of the two characteristics that differentiate "digital" products from their analog counterparts, according to Momentum: How Companies Become Unstoppable Market Forces is that "digital products never stand alone." Never stand alone.
While I'm evangelizing co-creating value with customers, the reality is (in many industries) we're still at the stage where acknowledging a value chain exists (i.e. we're not the entire value?) is first order of business. Co-creating with anyone -- be it the value chain or value ecosystem -- is still a tough sell in some circles.
Most carriers think their network resemble a razor more than an operating system.
"A conventional, stand-alone product, the Mach3 works with on virtually any beard and with every kind of shaving cream. It is in Gillette's best interest, then, to keep the Mach3 technology proprietary and to build a distinct brand position for this razor that retains much of its value proposition for Gillette, and Gillette alone, as possible." - Momentum
Carriers should be a gateway for their consumer into a universe of services - no matter who developed the service - and develop a strong 'platform'. Can you imagine Microsoft disallowing 3rd party developers from creating for the Windows operating system unless Microsoft is the sole tollkeeper? As much as there's competitive tension between Microsoft's own team and external developers that write for the Microsoft platform -- they both know it's a symbiotic relationship necessary for their mutual survival. They are growing an ecosystem together that creates value for the Microsoft ecosystem, and much of it goes to the Microsoft platform.
“An open network exposes a platform on top of which anyone can extend, augment, or add function and services.” -- Greg Papadopoulos, EVP and CTO of Sun Microsystems
Last spring 2003, I heard Papadopoulos compare and contrast the Internet and mobile carriers' networks. While the Internet is an open network that encourages innovation from third parties most mobile carrier networks do not allow for extension or innovation from outside their company. As an example, he complained about the lack of choice for voice mail systems to use with his cell phone (there is no choice, you get the carrier's voice mail application) as well as the lack of advanced features such as speech-to-text conversion, filtering and sorting all because we have to wait for the telco themselves to conceive, design and roll out the features.
Now while I don't expect carrier networks to be as open as the Internet any time soon (mostly for cultural reasons not that it isn't feasible), perhaps a more viable short-term strategy is exemplified by Microsoft’s platform strategy. Microsoft provides the infrastructure (operating system and developer tools) that allows their own internal team in addition to third-party developers to create an entire ecosystem of products and services. If Microsoft had been the only company that ever developed for the Microsoft platform, their success would have been severely limited.
"Third-party support established in people's minds a tangible source of differentiation for a particular class of products; Microsoft and Intel built their strategic market positions on this support. The other big market share and investment winners in the Marketplace of Products - such as HP, Oracle, Adobe, Novell, Sega, Compaq, Nintendo, Nokia, EMC, Sun, and others - leveraged these third parties as brand extensions in support of a differentiated position with customers. In the end, the best and most important features of a product were defined not on a pure point capability, but on total capability.As much as Microsoft, for example, tried to convince users that its software features were as easy to use and intuitive as the Macintosh's, third-party support did more to buttress and grow Microsoft's market share versus Apple than anything Microsoft did technically. It was no coincidence that when Microsoft or EMC or Nintendo introduced a new product, a raft of third-party supporters populated the entire purchase process - at the launch, in the store, in ads, and during financial briefings. Digital customers had begun to recognize this kind of support as a source of differentiation in the context of a particular product category. Even in 2002, after Time magazine featured a Macintosh computer on its cover, a reader's letter to the editor on the article echoed two decades of Microsoft's advantage over Apple: "The iMac is cute, but after cute, then what? At my local computer store, Mac-compatible software titles are vastly outnumbered by those for the PC." - Momentum: How Companies Become Unstoppable Market Forces
Now I understand why the carriers are nervous about Microsoft entering their territory... Microsoft figured out how to play the "leverage the platform" ballgame (and I know they don't always play nicely) while the carriers learned proficiency at protecting their prize baseball.
Comments