Ecosystems and Control
As we near the end of developer events, with Build and I/O behind us and next week’s WWDC, there’s been a lot to digest from what are often thought of as the big three ecosystem and platform companies. Each of these companies uses these events to enhance its various platforms and the ecosystems associated with them and to set a foundation for growth — both of the ecosystems and the revenues and profits associated with them. At the same time, however, there are increasing signs these ecosystems aren’t created equal and, in some cases, others may supplant them.
In a technological rather than biological sense, ecosystems are the collections of products, services, and companies which grow up around a particular item, feeding off it and, in turn, feeding value back into it in a symbiotic fashion. These ecosystems have often grown up around platforms, typically operating systems such as Windows, iOS, or Android, with the applications developed for the operating systems and third party devices that run them forming major parts of the ecosystem. However, this needn’t be the case. What an ecosystem really needs to be successful is the following:
- Compelling products and/or services, which can attract users
- A large base of users attracted by those products and services and themselves attractive to the various players in the ecosystem
- Cohesive forces which keep the ecosystem together rather than allowing it to fragment – standardized development tools, app stores, and software licensing models, for example
- A strong sense of identity for the ecosystem itself, such that users associate positive facets with the ecosystem rather than with other players such as OEMs or app developers
- Control over users’ time and attention while they’re on the platform
Not all operating systems qualify
As I mentioned, it’s often assumed operating systems are the focal points of these ecosystems, but that isn’t necessarily the case – not all operating systems necessarily beget cohesive ecosystems, and not all ecosystems are built around operating systems. For example, I’d argue there are significant cracks in Android as an ecosystem – though it has very many users, it lacks the cohesion and the consistent identification of the positive facets with Google and Android itself rather than with partners. The positive associations people have with their Android phones are as likely to be attributed to Samsung or another OEM as they are to Android. In addition, Google is increasingly struggling to maintain Android as a cohesive ecosystem in the face of several threats. In China, where Google’s services can’t operate fully, others take their place, reducing the value of Android as a Google-owned ecosystem. Elsewhere, parties such as Amazon have forked Android and used it for their own ends in consumer products, and Cyanogen intends to create a version of Android with all the Google parts stripped out and replaced with elements from Microsoft and others. Though Microsoft’s is by far the smaller operating system in the mobile world specifically, its ecosystem is arguably stronger in many ways if you combine the Windows PC installed base and the range of apps and services Microsoft is layering on top of other companies’ operating systems.
Google is obviously keenly aware of this, as its various attempts to regain control over Android over the past year or two demonstrate (something I first talked about a year ago in this piece). Google Now is an interesting effort which seeks to reinforce Google’s own services rather than third party apps as the centerpiece of Android. The advances showcased at I/O under the “Google Now on Tap” banner take this effort much deeper, potentially layering Google Now on top of apps even when users are in them. At the same time, Google seems to be working increasingly hard to spread its own services beyond Android, especially onto iOS, but it’s also uniquely threatened by some of the work Apple appears to be doing to squeeze Google out of its products.
Not all ecosystems are built around operating systems
Conversely, not all of the powerful ecosystems that are emerging are built directly around operating systems. In some cases, they’re being built at a layer above the OS, as in the case of the Asian messaging apps I discussed a few weeks ago in a piece for Tech.pinions Insiders. Interestingly, many of these have had the most success doing this on top of Android, something made possible by some of the openness inherent to that operating system, much to the detriment of Google. In Asia, these messaging platforms are, to a great extent, taking the place of Android as platforms and building their own ecosystems in competition with Google’s (these messaging apps also exist on iPhone, of course, but it’s less susceptible to being usurped because of its more closed structure and because of the iPhone’s strong, cohesive ecosystem).
The other big non-OS player creating a powerful platform and ecosystem of its own is Facebook, especially with the Messenger plugins announced at F8 earlier this year. Facebook is the closest equivalent to an Asian messaging platform outside of Asia, though it’s far less developed than they are. But it has all the key elements needed to build an ecosystem – well over a billion users, compelling products that keep those users engaged and spending time in them, an increasing ecosystem of partners (whether media companies, video producers, game makers, or messaging add-on providers), and a cohesive experience that now spans several Facebook-owned apps and yet is being increasingly tied together.
A battle few can win
Although some cracks are beginning to show in Android as an ecosystem, it still clearly qualifies as one in my book, and the main trend at the moment is one of proliferating ecosystems rather than consolidation. But these things tend to go in cycles, with every expansion followed inevitably by a contraction, as winners become clear and losers get weeded out. I think we’re entering an interesting period when we might well see some new winners and losers and a change in the shape of the market as a result.