It’s possible to write a history of the platform and ecosystem model of business and never mention Apple or Google, yet it was Apple and Google that created amazement with the scale of their ecosystems, altering not just their own business models but that of hundreds of other companies. It was the smartphone industry that made the business ecosystem a must-have, a matter of significant, embedded competitive advantage. Of course we now know that Google erred in scaling its ecosystem via Java APIs but the bug is spreading and fast. Ecosystems are about to convert new sectors to the smartphone model.
I recently got talking with Delyn Simons at Mashery, one of the enablers of ecosystem businesses through it API management services, and Jordan Brandt, the thought leader at Autodesk responsible for elevating the platform and ecosystem model in manufacturing. Two conversations but a similar purpose, to take stock of where the platform and ecosystem model is headed.
Delyn is ex-eBay and cites the platform as the firs to open an API to a developer community back in 2000. She is currently working with Intel, now that the chip giant has acquired Mashery (note I own stock in Intel but my relationship with Mashery goes back to writing the Elastic Enterprise – 2nd edition due soon – when I interviewed CEO Oren Michels) and says she is excited by what she’s seeing in the Internet of Things as a new domain for ecosystem businesses.
Moments in the Platform and Ecosystem Evolution
APIs are about to scale in physical environments. She quotes MapMyFitness, ETNA, in health and Food Essentials as good cases to follow. The ecosystem has been integral to wearables from day one. It is finding its way into finance – beyond payments where PayPal has been working with its ecosystem for three years – into innovation practices and the Internet of Things. That means it is primed for the broader manufacturing sector.
Jordan believes Apple will be a leader in this next shift.
A manufacturing ecosystem has to be so much more than a supply chain. Hardware ecosystems will embrace hardware designers, open engineering and design, software, additive manufacturing networks, and most probably app-developer lookalikes drawn from the Maker community. I wrote about it here, sorry much of it is behind a pay wall.
But Apple‘s initial contribution is likely to come in assembly. Jordan points out that Apple recently began patenting in printed electronics – specifically in systems for adding conductive materials to assembled objects.
The Cupertino company is under pressure to change the conditions of low-paid people doing the high-dexterity tasks at the end of the assembly process – i.e. linking components. What if the connections could just be printed in? Answer, they can be.
Proving and scaling that technology could accelerate local, low cost hardware production.
“The wearable revolution will create the need for a much more customizable product,” says Jordan, “fitting precisely to your body, for example the wrist but also in medical niches.” He’s thinking of prosthetics too.
And he adds in the use of mixed materials, being able to create products that have new mixtures of materials, for example to produce lightweight materials where necessary, alongside robustness.
Why this will shape up as an ecosystem-type play reminiscent of smartphone apps is because new material combinations require a different approach to design, more computationally-based so that designers can simulate thousand, if not millions of combinations.
Jordan points out that even a standard refrigerator has thousand of options in it. Multiplying those options through many permutations of materials, will create exponentially more possibilities in hardware specifications, with even objects like fridges being designed for specific niche markets.
As an aside, Samsung’s engineers cut their teeth on refrigerator patent-workarounds in the 1990s.
The scale of experimentation that comes with computational design is best done in self-learning ecosystems like the ones that have grown up in software. All sectors need to think about ecosystems and how to manage them, fast.
Delyn reserves top spot for Netflix, the company she believes has made the most impressive pivot in recent years. In terms of running an ecosystem, Netflix also shows that you need to roll with the times.
“Netflix had a very open API but then locked it down,” she says “because their business required them to support 1,000 devices.” They needed more internal focus.
Twitter too has taken to choking its API at 10,000 calls a day per developer, after which developers have to contact Twitter and discuss their plans. That too is all about focus, and managing the resource interface between platform and ecosystem, a problem we give very little thought to (currently ecosystems are inherently wasteful).
While platforms and ecosystems are table-stakes for the tech titans, there is a lot of variability in how they are managed.
Google, for example, has taken to recruiting developers almost in the way it recruits employees, spotting good presentations or posters and enticing developers by offering them privileged access. Going back to Android, Google used Java APIs to open its ecosystem to Java developers, a smart move but one that is the subject of its recent, possibly wide-ranging, legal defeat by Oracle.
These strategies matter because of what is coming down the tracks. To be an elastic enterprise that can pivot and shift where necessary has been a tech titan preserve but it is spreading. Netflix is no tech titan but an excellent example of an elastic enterprise.
But for most companies, the process of attracting and managing a valuable external resource is a total mystery. They don’t know the management levers, full stop. And according to Delyn that is leading to abuse.
“Apps developers are burned on so many ecosystems that start open and then close,” she says. As we’ve seen that can make sense for the platform.
One of the things she asks for of companies thinking of a platform strategy is how serious they are about a long term commitment. Not every company thinks it through.
Talking to Delyn and Jordan tells me we need to understand more about how ecosystems evolve, how they function and how they are best managed. The economy is about to depend on them even more than it already has.
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