An Acquisition too far?

Before anyone asks no- this is not to do with Anzac day or any linkage to a movie, this is all to do with need to change the business model to meet the needs of the customer. Traditionally we have seen businesses leverage an ecosystem for those elements that were regarded as being out of reach of their business model or simply deemed too unique to replicate. I mention this because some large global technology companies have looked at these Ecosystem’s to define their acquisition strategy to ensure they could truly meet the holistic requirements of the customer. Some of these leading technology businesses truly excel at technology acquisition to the point that I have stood with admiration at their aggressive approach to ensure accelerated integration in order to maximize the investment made.

Interestingly we are now seeing that some of these global technology companies are reassessing their portfolio’s as they begin to realize the “All things to All people” is increasingly impossible due to the acceleration of the Innovation curve (I have mentioned this in a previous article), the time line between the innovation leaders and the laggards and the resulting long tail has dramatically shortened from years to – in some cases – months. This significant shift in the innovation cycle has meant the ROI period that businesses could normally consider for an acquisition is now considerably shorter. Hence the traditional Ecosystem is potentially feeling left out in the cold as what was once used to look at for acquisitions is now increasingly regarded as risky and more likely to be replaced by a more recent solution than ever before.

However I believe that the business ecosystem is finally about to fulfil its true potential and in doing so become an innovation and business enabler to all. Let me explain, many businesses have always looked at the Ecosystem as a means to deliver a wider breadth of services to their customers and when significant opportunity arose, establishing close working partnerships or potential acquisition/merger discussions. However what some companies have now realized though is that in attempting to meet the ever evolving needs of their customers, they have lost the focus on their core capability, what is their DNA as opposed to the consolidated DNA of others.

What are we known for? What are we great at? Which partners can we work with to be even greater in the eyes of our customers? All of these questions will assist in redefining the role of an ecosystem to strengthen a particular business capability as opposed to seeking to merely add another service offering. Businesses need to first understand what they are or can be great at and then define the limits of that focus and only then to consider how they strengthen that capability through partners. The addition of any partner should have one purpose, make your offering even better, not necessarily broader.

But what brought this about; I mean everything was moving to IP right? It was to be the ultimate convergence of networks, services and platforms all onto one common infrastructure, surely this was always going to lead to large technology firms offering a broad selection of offerings. However the convergence to IP has introduced a whole new suite of products and services, think about the Enormous choice of Communication and Business tools available today through Application stores, Social Networking and even Vendors, I am not even talking about your traditional Service Provider or Online portal, who have again their own unique offerings. Now Many traditional technology businesses see these changes as threats and will seek to confront them, but consider Sun Tzu’s famous phrase “The Enemy of my Enemy is my Friend”, are these new wave businesses really a threat or have they found a niche which they can serve better than anyone else and through partnership or a broader richer ecosystem could actually strengthen your own offering. This type of partnership would then allow your business to lead your market competitors delivering you growth and recognition as a business innovator through adapting to the new world and … for me the time of Acquisitions solely for business expansion is coming to an end, the acquisition will still be there in the form of strengthening a business’s own core capabilities, however the focus will shift to Ecosystem’s to provide a new way of working, an exciting time and opportunity for all of us. We can cross that last bridge, but it will be in order to get to the other side in one piece and stronger than when we started the Business Ecosystem will be the key.