As a Service trend research – technology ecosystems

One of the chapters I am covering in a trend report I am working on (As a Service Trend) will focus on technology ecosystems. Technology is fundamental to all of the solutions in the new As a Service sphere because of the connection it provides to data, between customer and provider, to physical things, etc. From an ecosystem point of view, I will also be touching on technology platforms as well as looking at the organisation as a platform – a view being explored by many.

This post lays out the key premises for the chapter and some of the research I will be referencing.

Technology

Let’s take Microsoft as an example because it’s a very good one. I also work there so know its strategy intimately but please see this disclosure note on that. It is clear if you look at Microsoft CEO Satya Nadella’s current Vison and Mission that technology lies at the heart of it.

Microsoft is a software and technology company after all so no surprise there. Look a little closely and the Vision for Technology is expressed in these terms: The future of computing: intelligent cloud and intelligent edge.

This is such a great way to capture the core elements of technology at play in an ecosystem that would support an As a Service business model. It covers the core, the intelligent cloud, and all the things that will interact with it at the intelligent edge, e.g. devices, IoT sensors, etc.

You could see how, for a manufacturing company for instance, that might need to build a subscription service for its customers, how important this might be. I have written about this before for the auto industry: Ways auto industry can transform with As a Service and employee experience

Having said all this, when you look at the Microsoft Mission, you see that Technology is not the sole focus.

People

Microsoft’s Mission is expressed in terms of people: Empower every person and every organization on the planet to achieve more.

It is also perfect for a platform company, specifically the empowering bit.

Taken together (technology and how it empowers people) and you have the perfect foundation for a platform. Networks + Platforms = Ecosystems is how Stowe Boyd expresses it in this post which is based on recent research he did: Evolution of the Platform Organization.

That networks = people should be pretty clear and so this has to be intrinsic to any framework that describes an ecosystem. I just did not bring it into my chapter heading to keep things simple and considering it is implicit in any ecosystem view.

And let’s be frank, in any strategy to make technology the heart of your transformation as many digital transformations are and should be, technology will not be the only focus for success. These Harvard Business Review posts cover that neatly:

• Digital Transformation Is Not About Technology
• Digital Transformation Is About Talent, Not Technology

Platforms

Platforms are often made up of a set of technologies providing an end to end solution. Suites made up of inter-related modules intended to serve a common purpose in other words. By their nature, they are often extensible. They can be re-used, recombined, refactored into new services, commercial or otherwise. Sometimes they are for internal purposes, other times for external purposes.

My focus on platforms is for the enterprise side, not the consumer side, so B2B.

On the enterprise side, citizen developer programs within companies often lie at the heart of activities. Microsoft’s Power Platform and Azure are a great case in point as I wrote about here: For citizen development to work address innovation culture first.

The platform view is receiving increased prominence and here are some really good articles about that:

• How to Transform and Build a People Platform. Neatly distinguishes between the people and software side of things when considering a platform play. Based on some really good analysis of companies that have developed platforms.
• How the Platform-and-License Model May Outpace the Product Model. Another of my chapters will be titled Products to Services. This article covers that point well and also what it takes to create a platform but it also considers many other As a Service factors that I will also be covering in a separate chapter (Subscription Economics).
• The platform play: How to operate like a tech company. This article from McKinsey makes a clearer connection to technology and tech companies for non-tech companies and what they need to do to build platforms and operate like one.

Ecosystems

Ecosystem is the bigger picture. It covers more than just the technology, people and any single organisation. Or at least it covers these elements holistically. And from an organisational perspective, it looks beyond the formal boundaries of the organisation.

An ecosystem as an interconnected system is not a new concept. As this HBR article puts it (Ecosystem Businesses Are Changing the Rules of Strategy):

The term “ecosystem” has been used in business for 20 years. Companies including Volkswagen and Toyota have been orchestrating huge networks of suppliers and distributors for more than 50 years. Lloyd’s of London, the insurance marketplace, is a classic ecosystem and was founded in the 17th century.

This article linked above goes on to describe the strategic considerations of an ecosystem really well by distinguishing between the building of moats as a basis for competitive advantage, to operating turnstiles for it.

Winning in digital ecosystems: This issue of Digital McKinsey Insights looks at how companies will need to embrace new relationships and ways of collaborating in a series of articles.

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