Insights - Walled Garden 2.0.
Walled Garden 2.0.
There was a time when the mobile internet consisted of a collection of operator portals, which provided the entry to a preselected set of services consumers could access by entering the gates of a virtual garden. Competition was primarily focused on getting the consumer through the gate and keeping them within the portal, thus the term Walled Garden was born.
Then came search engines, social networks, the evolution of HTML, smartphones and mobile broadband (terribly marketed as 3G) and the carefully constructed operator garden walls started to crumble. While operators portals moved nearer to the user using technologies as on-device widgets, or by rendering pages specifically for each device, the multitude of service choices made available by new entrants made it more difficult for operators to entice consumers. The walled garden model was ultimately superseded by the open internet model and the business landscape changed forever: offering a service alone was not enough to succeed. Instead, the new business reality demanded a complete offering mapping the customer experience beyond the service provision: devices, application stores, content and partnership agreements, APIs and developer communities to bring those to life, became inseparable parts of the new Web 2.0 paradigm. The Wall Garden business model was ultimately replaced by the Ecosystem model.
But are ecosystems open by definition?
The Apple business approach is a prime example of a closed ecosystem model. Through iTunes (and its amazing content partnerships), MacOS innovations, the ground-breaking AppStore, brilliant iPod, iPhone, iPad devices, Apple created an ecosystem that 100's of millions of consumers in the world cannot live without. Being in this ecosystem is great, with one restriction: communicating with your friends who live outside the Apple ecosystem is ... not simple. Facetime to Skype Video Call? No. iMessage to Whatsapp? Sorry. One could argue, Apple's ecosystem, albeit game-changing and innovative in so many ways, is a just a bigger and shinier Walled Garden.
Google was not aware Apple was changing the world but was fast in replicating the Apple model with Android, Google Play, Google+ and so forth. True to its vision not to do evil, Google made Android free, sparking a revolution for device manufacturers. The ecosystem built around Android soon overtook Apple's ecosystem by most metrics. This dynamic exposed a previously unseen side of the ecosystem economy: where in the Walled Garden model the competition was about getting and keeping consumers into the portals, in the ecosystem paradigm the competition moved to slowing down or stopping others from building their ecosystems. Gollum-faced patent trolls emerged. Lawsuits became a business-as-usual corporate activity. Everyone against everybody.
The inability to protect innovation e.g. through legislation has been and still is a huge, cross-industry issue. While not specific to technology, the energy put into lawsuits in this sector is disproportional, resulting in a loss of focus on the user, the one who ultimately keeps the value chain alive. Today's ecosystems are more concerned about themselves than the user, and more than often users are used to fight ecosystem battles.
Here is an easy (and maybe unfair?) way to demonstrate the type of positioning that does not serve the user. This time using Google as an example. Google has always been the place to go for open APIs and capabilities for developers to create open services. Recently though, Google has been acting in a way that is confusing - to say the least - by killing off APIs it says it does not see the need to support. The list of such APIs gets longer, with the most high-profile one being XMPP (aka Jabber protocol). The new Google unified Hangouts are great, but Google discontinuing XMPP implies restrictions in openness for messaging across communities. There is no doubt that it will get more difficult to work with Google services. The Verge article Pick your poison: messaging will be fragmented, expensive, or locked-in is a very succinct summary of the issue.
Putting everything together, the move towards a world of self-contained, non-interoperable ecosystems has accelerated. Cooperation and its euphemistic synonym of coopetition is absent. It is a sad realisation that, beyond the hype, the only evolution that happened since the Walled Garden model is that the garden is now a park with more attractions, that gives a discount for consumers in return for their privacy details and the subsequent exploitation opportunity.
Looking carefully at the current moves in the industry shows that the protective walls around ecosystems are rising by the day. The good news is that this behaviour is usually an indication that the next disruption is around the corner.
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