There is news coming in that Amazon will start marketing a Smartphone soon. If you connect the dots from past it will seem an obvious course for them. They already have most ingredients in place: customized Android UI, App Store, hardware in Tablet form factor and operator relationships as part of the Kindle franchise. The only question is: will it be a me-too offering or a different take on Smartphones with mobile voice and data bundled. I think it will be the latter. Most likely digital content and Amazon prime will also be somehow involved.
But Amazon’s Smartphone is not the topic of this post. Over last decade, we have seen the classic ways in which we structured the industry as hardware manufacturers, consumer and enterprise software companies, Internet web services, retailers and so on fade away. Google does everything, so do Apple, Microsoft, Amazon and Facebook. I will leave HP, Oracle, IBM and SAP out of this discussion for now.
How did we get to this new world and why it’s important to understand it? I am of the opinion that it was, in fact, Microsoft that started this “trend”. They went from a Basic interpreter to become the most valuable company in the world in the 90′s by executing well on many fronts and being ruthless with competition. The innovator’s dilemma didn’t seem to apply to them and they clearly understood that they will not be “killed” by direct competition with a better operating system or office suite. They already had very strong network effect and OEM relationships to protect that. The threat will come from new players which will originate during a paradigm shift. And the first shift to really test them came from the Internet and their response to Netscape, the Internet pioneer, is well documented. I believe Netscape didn’t die because of Microsoft but poor execution. You can build a successful applications business on Windows platform even when Microsoft is in your direct competition. Intuit vs Microsoft Money is a case in point, but let’s leave this for other discussion and get back to our main topic.
So, when you combine paranoia of the innovator’s dilemma, ability to execute well in multiple areas and history of winner takes all in Software and Internet businesses, it becomes more clear why everyone is fighting on every front. The modern tech giants are remarkable companies. They can put together new HW, SW or services within a matter of months. The incentives to control the whole ecosystem are immense and the downside to leave any loose ends catastrophic.
The important IT opportunities for next couple of years are Mobility, Cloud Computing, Social Networking, Big Data and E-commerce. E-commerce here includes both digital and physical goods. The companies to thrive will be the ones with successful ecosystems and strong consumer lock-in. Today’s Tech giants know this very well and therefore everybody does everything.
So, where does this leave you as a Tech Entrepreneur? It should not make much difference to you in terms of what’s important. You won’t succeed unless you are world-class in whatever it is that you do and have determination to go past the tough first few years. You should, however, understand the trends and ecosystems you operate in and pick your battles wisely. Do not align yourselves too tightly with one ecosystem or vendor. And lastly, focus on the ability to execute fast and turn the ship when tides shift.