Ecosystems – are they really the “Next Big Thing?”
Business (and even more so, technology) experts tend to fixate on catch phrases and then use them incessantly trying to convince us they know what’s going to be the “next big thing!”
Just in the past few years alone, we’ve been bombarded with “AI,” “Big Data,” “Agile,” “Cloud,” and of course, more recently “Digital Transformation.” Some were big things, but a lot were, quite honestly, just over-hyped and mis-used words.
Well, move over past champions, because “ecosystems” now rules the catch phrase universe!
For those of us working in the B2B alliances and partnerships space, a day doesn’t go by where we aren’t bombarded with articles, blogs, and social media posts heralding (or warning about) the era of Partner Ecosystems.
Putting together this article, my goal was to accomplish a couple of things:
Provide an easy-to-understand definition of a business ecosystem
Explain why ecosystems are much more than just a catch phrase but a fundamental, “Back to the Future” change in the way businesses buy and sell
Ecosystems really are the “Next Big Thing” for partnerships and alliances!
First, a simple definition:
A business ecosystem is the network of organizations — including suppliers, distributors, customers, competitors, government agencies, and so on — involved in the delivery of a specific product or service through both competition and cooperation (1)
The concept of business ecosystems has been around since the early 1990s, when James Moore, a Harvard Professor coined the phrase in an HBR article.
So why, almost 30 years later, is there so much buzz and energy around ecosystems? It’s pretty simple…long-standing, business buyer preferences have been re-energized (and enabled) by 3 things:
Cloud Technology
SaaS Solutions
Open APIs / Integrations
Let me explain using an example from the business application software industry. In the software industry’s early days, businesses almost always bought “best in breed” solutions because the software was purpose built to solve specific business challenges (think Oracle G/L, Peoplesoft H/R, Corel WordPerfect, Harvard Graphics, etc.).
Unfortunately, the inflexibility of on-premises computer infrastructure and the cost and time to integrate the individual solutions eventually led to the rise of fully integrated software “suites” purchased from a single vendor (e.g., Oracle ERP, Microsoft Office, etc.). The ecosystem for business applications morphed from many suppliers and competitors to a very few monolithic suppliers that dominated the ecosystem.
So fast forward to today and once again business customers have the option (and are preferring) to buy “best in breed’ solutions and the business software ecosystem is chock full of suppliers and competitors and some of the monolithic “suite” providers are struggling to keep pace. What changed?
Cloud Technology – for many companies, on-premises infrastructure is a thing of the past and Cloud computing is affordable, flexible, scalable (both up and more importantly down) and secure
SaaS Software –building point solutions using Cloud and low-code / no-code development options are quick and relatively inexpensive
Open APIs / Integrations – SaaS software suppliers are either pre-building or providing easy integration access to other SaaS suppliers
So, like most great business opportunities, demand and supply have aligned and we are entering an era where ecosystems will dominate both the supply and demand landscape.
But don’t just take my word for it…here’s what some of the leading marketplace experts are saying:
“76% of business leaders surveyed agree current business models will be unrecognizable in the next 5 years — ecosystems will be the main change agent” (2)
“IDC predicts that, by 2024, those who adopt an ecosystem business model will grow 50% faster than companies that do not.” (3)
“Gartner anticipates that disrupting the current [PRM] business models through building sales partner ecosystems will be a game changer.” (4)
“We estimate that at least a dozen sectors, including B2B services, mobility, travel and hospitality, health, and housing, are reinventing themselves as vast ecosystems, networks of networks that could add up to a $60 trillion integrated network economy by 2025.” (5)
“Ecosystem growth requires automation. With the rapidly shifting partner landscape, channel leaders and B2B marketers can no longer succeed with manual human-centric processes and reliance on spreadsheets to manage their partner programs.” (6)
Is your Partner Management technology ecosystem-ready or will you enter the ecosystems era armed only with stitched-together products from the 1990s (spreadsheets, presentations and sticky notes)!
At a minimum, your Ecosystems Partner Management solution should:
Be housed in a robust and secure Cloud infrastructure where ecosystem partners can be comfortable engaging and collaborating
Have access (either built-in or through APIs) to collaboration tools like chat, video, document management, etc.
Have an Open API and be easy to integrate with complementary SaaS solutions within the Partner Management ecosystem
Be a high-fidelity, and trusted source for Partner Management Business Intelligence & Reporting, Dashboards and Business Reviews
So, here’s what I hope you got from our Blog today:
Business and technology experts hype and over-use catch phrases constantly
Determining which trends are real versus hype is critical to getting in front of the curve
Ecosystems are the hottest catch phrase right now
Historical B2B buying preferences have been re-energized (and enabled) by Cloud and SaaS technologies (Back to the Future)
A new era of ecosystems has begun and will dominate the B2B marketplace over the next several years
Ecosystem management requires real automation…not just spreadsheets and sticky notes
Ecosystems really are the Next Big Thing…are you and your partners ready!
For more details or questions please contact me at bobjones@collabtogrow.com.
(1) Definition - What is a Business Ecosystem? Investopedia
(2) Accenture: “Cornerstone of Future Growth: Ecosystems”
(3) IDC Market Perspective: “Ecosystem Business Management Concept and Capabilities”
(4) Gartner: “Market Guide for Partner Relationship Management Applications”
(5) McKinsey Quarterly: “Ecosystem 2.0: Climbing to the next level”
(6) Forrester: “Channel Software Tech Stack 2020”