When an industry is in the throes of disruption relationships change and organisational characteristics morph. In disrupted sectors competitors become partners and partners become competitors.
In those industries business models change, too – a network operator becomes a content provider and a systems integrator becomes a quasi network provider, to offer just two examples. All of which has significant implications for the customer-supplier relationship.
In a previous era, one leading US technology executive popularised the term “co-opetition” – a portmanteau of co-operation and competition – to capture this transformation. Ray Noorda was the CEO of Novell, a company that provided software that brought PCs and peripherals together on to a single network.
Novell dominated the network operating space in the late 1980s and early 1990s but wanted more and began to compete with Microsoft (a former partner), becoming a supplier of desktop operating systems and productivity applications. Novell overreached and Microsoft prevailed.
For Noorda’s 1990s triple play read today’s telecoms and media quadruple play, a combination of landline, mobile, broadband and television. Those looking to entice customers with this four-in-one offer remain confident of success.
While just 6 per cent of UK households turn to one provider for all four services today, according to figures from Strategy Analytics, market growth is likely as consumers acquire more devices that need managing. Companies that can offer economies of scale, the promise of simplicity, excellent customer and networking services, and compelling content are likely to succeed.
Much recent activity among telecoms and media organisations can be seen through the prism of the quad play. For example, BT’s multi-billion pound acquisition of Premier League and Champions League football rights tells us two things at least: BT wants to consolidate its traditional business and has designs on broadcasting too. It has operator rivals in its sights, for sure, but also the likes of Sky and the BBC.
Vodafone, meanwhile, is making a pitch for fixed-line services to sit alongside its established wireless network – and throwing in a Netflix subscription for good measure. And Google, for so long a beneficiary of the underlying networks as a provider of over the top (OTT) services, is planning to launch its own mobile network.
Google will now go up against those it once called suppliers. To have Google as a customer one moment and a competitor the next really ought to focus minds.
As the competitive landscape becomes more complex, so commercial decisions need to be more holistic, more responsive to the macro trends. Customer and technology partner need a shared vision of the future.
There must be synergies rather than the all-consuming rattle of dispute, the latter usually triggered by a disconnect in perceived risk. The relationship, in other words, must be underpinned by a collective interest rather than a conflict of interests.
The quad play will soon to become the quintuple play as Internet of Things based services puts the user in control of all household devices – reflexive analytics – and it may simplify consumer management but it presents and even bigger challenge for corporate strategy.
This is one example of modern business where disruption is the norm and old, rigid structures across all markets are being redefined and boundaries are being redrawn. It is in the context that customers need to think hard about who they choose as suppliers – with whom they co-operate and with whom they compete.
He is a former Management Consultant, having spent five years at A. T. Kearney, advising and leading on IT Outsourcing and operational efficiency solutions across a broad range of sectors.
He is a graduate of Manchester University, Electronics and Electrical Engineering, FIET, holds a Dip. Law from City University and completed his Bar Finals in 1995. He is the former Chair of the City of London Citizen's Advice Bureau and Liveryman of the Worshipful Company of Information Technologists.
He is married, with one son, and lives in Islington. Outside of work, his interests include music, and writing screenplays.