Sunday, June 3, 2012

The Changing World of Vendor and Provider Relationships

This past week, Mary Meeker published her amazing annual look at technology trends and the state of the web. As usual, it provides great details around macro-level trends effecting usage, devices, economics and much more. And the highlight is her "Re-Imagination - of Nearly Everything" section, looking at how innovation and software are rapidly changing nearly every element of our daily existence.

While this absolutely applies to services and devices, it also applies to the rules surrounding technology vendors and services providers. In the past, vendors employed 1000s of engineered and delivered HW and SW capabilities to customers and service providers. In many cases the customers or service providers built custom automation (eg. scripts) or management software, but few built their own custom hardware, operational software or APIs. But all of the old rules of engagement and creation are changing, and changing rapidly.

For many years, we've seen technology vendors buy Software-as-a-Service (SaaS) companies to expand their portfolio (eg. WebEx, Boomi). Other technology vendors have launched their own SaaS services (Microsoft 365, SAP OnDemand, Oracle On Demand, VMware SlideRocket).

But the new rules are getting very complicated.

  • Standards, such as APIs, are no longer getting defined by standards-bodies (W3C, IETF, IEEE)
  • Hardware vendors are now Cloud Service Providers (eg. Apple iCloud)
  • Service Providers are creating their own operational frameworks (eg. OpenStack) and may or may not compete with vendors attempting to offer on-demand services
  • Service Providers (Joyent, Virtustream) offer an on-demand service, but also offer their operational software as an on-premise offering.
  • Service Providers are buying Systems Integrators (eg. NTT & Dimension Data)
  • Enterprise companies are partnering on APIs with Service Providers (eg. Eucalyptus and Amazon AWS)
  • Companies are using open-source as a strategic weapon to attract developers from rival offerings (eg. CloudStack vs. OpenStack vs. Eucalyptus) 
  • Traditional hardware companies are venturing into the world of open-source software.
So the question every technology company has to ask themselves, regardless of where they are in the supply-chain (or value-chain) is how are you going to adapt to the changing rules? Are you going to continue to play by the rules of the previous era, or are you going to realize that there are opportunities to bypass a part of the supply-chain to unlock new possibilities? And if you play by new rules, what does that mean for legacy aspects of your business, which are often the areas where today's revenues come from?

For vendors, providers and distribution channels, we are most definitely in the beginning of the"Re-Imagination - of Nearly Everything".

1 comment:

  1. With vendors we can expect a good business because the vendor only sell the products in streets...

    Vendor Questionnaire

    ReplyDelete