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Building the Business Ecosystem

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ARM's 800 partners in its Ecosystem

Have you noticed how many vendors are now saying that they have an ecosystem or that their offer is delivered thanks to their ecosystem?  Ecosystem seems to be the new buzzword or sexy term for what might have simply been called collaborative networks or ‘partnering’ a few years ago, and everyone is trying to get in on the act, claiming that they have ‘ecosystems’.

Nevertheless, as customers become more demanding and expect compete solutions and rich offerings from their suppliers, vendors will struggle to provide all the elements themselves and find that 2+2 can indeed be 5, if they build a good ecosystem to provide the complex and varied offer that is increasingly demanded by the market.  So ecosystems today are alliances of vendors, 3rd parties, partners, providers, and even cooperating competitors (‘coopetition’) and customers (the ARM ecosystem model), packaged and labelled as being an ‘ecosystem’.  In this context though, ‘Business Ecosystem’ is a more correct label.

Business ecosystems are particularly appropriate in high-tech markets, but the term is starting to be adopted in non-tech markets, such as banking, equipment/machines and education.

Because this is a new, nascent concept, there are few rules or guidelines as to what to do, what not to do, and how to build an ecosystem for real.  The Marketing Application Note, Building the Business Ecosystem in the Knoweldge Base, explains in more depth what a Business Ecosystem is, looks at best practice and exemplars, and considers how to build and then evaluate the success of your business ecosystem.

Building an ecosystem is not something to be undertaken lightly or half-heartedly.  It requires continuous investment over a number of years, and strategic intent on behalf of senior management.  Moreover, if you claim to have an ecosystem but don’t make the necessary nurturing, the market will find you out.  As vendors get better at building ecosystems, we expect to see business and competitive focus shifting to the business ecosystem itself, so that competitive advantage will be with those whose business ecosystem is larger, more powerful, better developed and better resourced than its competitors, so the battle ground will shift to one vendor’s ecosystem versus the competitor’s business ecosystem.  This is already starting to happen with ARM’s Cortex versus Intel’s Pentium / Core family, and has already happened with Nokia’s fight to regain lost share being positioned by Stephen Elop as a being a ‘war of ecosystems’.  Read more in the The Marketing Application Note, Building the Business Ecosystem

Posted on: Sunday, January 08, 2012