Embracing Commoditisation

Today saw the double announcement that Salesforce and Rackspace (and hints that Amazon) are entering the mobile app development space. In fact actively commoditising it.

Outside of the hyperbole about how mobile is the platform de jour, what struck me about this is it was entirely predictable.  I’ve fast become a big fan of the work of Simon Wardely. if you read his latest series of posts, you will see what I mean about predictability.

Firstly, everything evolves, and the commoditisation of mobile app development is no different.  Today’s announcement probably saw a rapid movement up the curve for some companies, the ones still in the custom build phase, however the SDK’s are now a product bordering on a commodity.

Simon Wardley's evolution model

Simon Wardley’s evolution model

The second reason this was predictable was using Simon’s ILC model. My view on this is that in the greater game of strategy, it is always in someones interests to be doing the commoditising, as opposed to being commoditised.  And in the new world of cloud computing, the big guys in this space have figured out models that actively target sectors to target. (see Simon’s post on Amazon)

Simon Wardley's Innovate, leverage Commoditise model (ILC)

Simon Wardley’s Innovate, leverage Commoditise model (ILC)

The thing is, in actively commoditising other industries, these cloud players drive scale onto their platforms, create ecosystems of developers wedded to their platforms, drive more integration into their core offering (SFDC) and can see the new breed of winning plays in which to acquire.  Then rinse & repeat.

Now, I know what it is to live in a company that is being disrupted, you worry about today’s numbers and how you marginally improve your portfolio day in and day out… and I know that it is easy to look back in hindsight and say “that was predictable”.  The trick for us all, and i think the true message in Simon’s serious of recent posts,  is that we owe it to our companies or ourselves to undertake the process of predicting what will happen to our company and jobs and take the appropriate steps to react.

It’s that lack of understanding [of] Why which will almost certainly be behind the highly probable and unnecessary disruption of once great companies such as HP, Dell, IBM, Oracle and SAP by a predictable market change such as cloud computing. These companies by right of their position should never face disruption by a predictable market change. They should only be disrupted by an unpredictable market change

In fact Simon is pretty scathing on companies who fail to react to what is predictable (more on this in another post)