Visionmobile: Innovation toolbox for telecom operators (12) Chapter 10 will turn openness into a competitive advantage

Chapter 10 turn openness into a competitive advantage

"Openness" has different meanings for different people. Standardization and interconnection (an open approach) are both key factors: mobile phones and text messages can be expanded to provide ubiquitous capabilities across carrier boundaries.

As long as the telephone and SMS are closely integrated into the carrier's network, business interconnection between operators means network interconnection. For example, text messages and lottery messages can cross the operator's border. Different carriers must connect their networks at the service layer. Through IP address transmission, the business is independent from the network and the Basic settings are changed. IP becomes a common Interconnection layer between networks, which provides a completely new way to achieve interconnection at the business layer. For example, WhatsApp leads to the loss of a large number of SMS and MMS messages, and does not need to be interconnected between different network service layers, thus achieving a wide range of global coverage.

Openness is one of the basic features of a multi-faceted platform (see chapter 1. The Platform lowers the entry threshold through open APIs. Different types of partners produce valuable applications, hardware accessories, and other supplements for the platform. A successful platform is also closed (integrated) around the core business of the platform owner. In other words, openness is to create an ecosystem that provides supplements; integration or "closeness" is to obtain the value of the ecosystem owner.

For example, Apple is open to application developers, but its core business and consumer electronics are very closed. Google is open to Web developers, but its computing infrastructure and search rankingAlgorithmIs closed. This applies to many ecosystem owners in other companies, such as Facebook, Amazon, Netflix, and Microsoft.

It is an important source of competitive advantage to clearly know which part of the value chain needs to be open and which part needs to be closed. If a company makes a mistake and opens its core business, it will eventually lead to loss of valuable differentiation capabilities and will be forced to compete in price. For example, talking about openness does not help Nokia's Symbian become a possible alternative for iOS and Android. Nokia's openness to Symbian is at the core platform level, which is exactly what Nokia needs to integrate as an OEM (closed ). Nokia needs to focus on Symbian "Openness" and attract developers, rather than other mobile phone manufacturers.

If the lack of integration around the core business of ecosystem owners leads Michael Porter to say that "competition is the best" or that all wrong strategies lead to the same path as others, and think about how to get better results. This is a tough competition. Any advantage that surpasses competitors is short-term.(Because it cannot create unique values, it is easy to be imitated or followed)

Core Business integration is essential for providing unique value, raising the threshold for entry, and achieving sustainable profits. For example, for API initiatives of telecom operators, it is best to create unique values for operator users, establish lock relationships and build entry barriers around the operator's core business.

 

When evaluating innovation investment, operators need to ask the following key questions::

• How do you provide additional services? That is, how can we reduce the friction between ecosystem partners and create more value for the ecosystem as a whole?

• How to integrate core voice, data, and SMS services to get value from the ecosystem?

• What regulations, standards, and alliances force you to "compete for the best" situation? Thus, which innovation effects can only achieve short-term competitive advantages?

 

related links: My Industrial Ecosystem chain and miscellaneous articles