Meta vs. Apple: What builders of digital ecosystems can learn from...
Digitalization continues to progress, with AI on the rise, and certain tech companies are thriving. The dominance of these big tech firms increasingly relies on their ability to manage digital ecosystems with a diverse group of "complementors" - firms or individuals collaborating to create value for end customers. As economies lean more on digital technologies, the significance of ecosystems is growing for a wider range of companies. It is crucial for firms to develop strategies for ecosystems based on a clear understanding of what makes them successful, whether as "orchestrators" building the ecosystem or as complementors contributing and transacting within it.
Reflections on Ecosystem Design
Two recent events have brought attention to the balance between openness and control in ecosystem design. Meta's Mark Zuckerberg has publicly shared his vision of an open AI ecosystem, a notable shift from Meta's previous closed approach. In contrast, Apple has pursued a controlled ecosystem approach with its VisionPro headset in the spatial computing realm. The differing strategies of Meta and Apple prompt considerations on the best approach for ecosystem builders.
Lessons from Meta
Meta's journey into the metaverse showcased valuable lessons applicable to ecosystem design. The belief that an orchestrator must have total control is often a misstep in ecosystem design. Meta's experience highlights that total openness and absolute dominance are not the only options. Complementors play a significant role in shaping a successful ecosystem.
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Evolution of Ecosystem Strategies
Looking back, Facebook's attempt to create an insular ecosystem with control over hardware and software was reminiscent of Meta's early approach. However, the results fell short of expectations, leading to a shift towards collaboration and openness. Meta's current strategy strikes a balance between openness and control, allowing third-party involvement while maintaining certain restrictions.
Diverse Approaches in the Ecosystem Landscape
Various companies are exploring different approaches to ecosystem building. While some aim for control over both hardware and software, others opt for more open platforms that encourage third-party contributions. Research indicates that overly controlling approaches often fail to garner support from complementors, emphasizing the importance of collaboration and partnership in ecosystem success.
Challenges and Opportunities
Apple's strategy of a hardware lock with limited openness has faced challenges in attracting complementors. The reluctance of popular apps to join the ecosystem has impacted the appeal of Apple's hardware. While leveraging power may seem advantageous, imposing strict control can hinder ecosystem growth.
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Meta's strategic shift towards collaboration highlights the potential of interconnected and interoperable ecosystems. By focusing on creating a user-friendly metaverse, Meta aims to set standards for digital identities and enhance the overall user experience.
The evolving landscape of digital ecosystems demonstrates the importance of collaboration, openness, and adaptability in fostering ecosystem success.