Is not being Google a Competitive Advantage?
For any major tech battle, we have always had a few names that dominated the field. Some have survived over the years and moved from battle to battle as new names joined in. Artificial Intelligence is the latest battleground — from digital assistants all the way to autonomous driving. While we are still very much in the “recruiting soldiers and training for battle” phase, there are certain companies we are looking at when assessing the market and the progress made: Amazon, Apple, Google, and Microsoft.
Most of the work happening today is on building the foundation for the future. Companies are busy gathering data, training networks, building ecosystems and it seems some brands are also trying to establish themselves as an alternative to names some already see as winners. They are doing that by looking at the bigger picture and trying to build a platform that will become the cornerstone of areas such as voice-first and location.
The thirst for new names of platform providers comes from the desire to not to put all the eggs in one basket and to hedge the bets as to what or who will win in the end. Vendors who embraced Android find themselves struggling to hold hardware margins and differentiate on services, all while competing with their platform provider for the most engaged and lucrative users.
Amazon’s AI Platform
We discussed in our post-CES podcast how this year at the show, AI was everywhere and, when it came to the home in particular, Amazon’s Alexa was everywhere. Amazon was early at the gate with its Amazon Echo products and established Alexa as our primary digital assistant. It did not take long, however, to see Amazon’s interest was much broader than that. Amazon wanted to establish Alexa as the preferred voice-control platform. Amazon did not have a phone to build Alexa on and the home seemed like the most reasonable place to start, given that, in the home, we tend to use several devices and not rely entirely on our smartphones. The location was right and so was the timing, as Amazon rode on the bet many early tech consumers were making on connected homes.
Alexa’s skills have been growing quickly since the release of the API set allowing manufacturers of connected home devices to speak to Echo devices. But Amazon did not stop there. More recently, its Alexa Voice Service allowed vendors to actually put Alexa directly into their devices, taking them from “works with Alexa” to “Alexa inside.” Clearly, Amazon is not doing this out of the goodness of Bezos’ heart. Amazon’s ultimate goal is not selling the most connected speakers but rather becoming the de facto platform for AI in the home.
Let’s be clear. Amazon’s early success is not just because of how open the ecosystem is. Companies are looking at alternative options when it comes to partners and looking for openness but also predictability when it comes to bringing to market products or services in direct competition with theirs. It is early days to see if the trust vendors are putting in Amazon is valid but, for now, the e-commerce giant presents less of a threat to the many brands trying to play a significant role in the connected home and voice-first era.
HERE’s Location Platform
Outside the home, when we talk about AI we often talk about autonomous cars. In this area, we are even further away than in the connected home space from seeing the final impact of AI on transportation overall, not just self-driving cars. Yet, the groundwork done now is what will make everything else possible. When we are talking data gathering and network training in this context, map building is key.
If you tried to play the association name game with any of your friends when you said “map” I bet all of them would say “Google”. The search giant has been in the map business for many years and has won consumers’ preference. HERE is not new to the game either. The mapping and location service company was once owned by Nokia and was built on the acquisition of Navteq. At the end of 2015, HERE was sold to a car-maker consortium of Audi, BMW and Daimler. In late 2016, Tencent, Navinfo and GIC announced their plans to jointly acquired a 10% stake and, in early 2017, Intel acquired a 15% stake. HERE also announced strategic partnerships with Navinfo, Mobileye, Intel and Nvidia all surrounding the topic of maps for automated vehicles.
HERE’s ownership by a car consortium was the first signal that some car makers were starting to consider collaboration over isolationism driven by proprietary technologies. The need to build a broader data set and learn from experts in other areas, all in the attempt to beat tech companies such as Google, Apple, and Tesla to the finish line, has been growing and HERE has certainly benefited from this urgency.
While HERE maps have had somewhat limited traction with consumers, especially in the US, its location platform business has been popular in the enterprise space with big organizations such as Amazon and Microsoft listed as clients.
As carmakers, as well as municipalities, are readying for a self-driving world, I wonder just how much HERE’s core competence, as well as a business model not set to monetize from search and advertising, will play a role in deciding who the right partner is.
When it comes to voice-first and location, Amazon and HERE have transitioned from providing a service to providing a platform. They have done so at a crucial time when players who might be wondering if they can “beat Google” don’t necessarily just want to “join Google”.