Strategic Alliance Magazine Q2 2016 - 21

COVER STORY els, language, and practices. It takes experimentation to get the business aspects of ecosystem partnering right. Companies must learn quickly, iterate strategies, manage complexity, and try new models for value creation, delivery, and capture. At the same time, more data than ever is available for companies to make decisions about how to serve these always on just-in-time customers, be they consumers or businesses. Data and technology are also upending classic definitions of product and value. Product is now data-rich service and value is frequently only realized at more value for all concerned as more available services create more pull for end users, and thereby increase the potential for more vendors to provide an increasing array of services. Additionally, with many platform-based ecosystems, users can become service providers and vice versa. For example, the Salesforce app developer is very likely to use the software platform to help manage its customers. Every value-capture model you put in place will be an experiment. Understand the critical underlying assumptions. Collect, analyze, and interpret the data to validate or invalidate the assumptions, and then iterate the model. As more experience is gained, standard business and partnering models will emerge. For now, it is a bit of the Wild West. COMPLEXITY MULTIPLIES the point of consumption, such as hours of incident-free flight for a jet engine that burns only a pre-designated amount of fuel. Or perhaps it is when a gene therapy enables a certain number of years free of disease progression for a patient. No one company has the capability to provide, integrate, and deliver the complexity embodied in the turnkey solutions customers seek. Ecosystem partnering is not the same as linear or hub-and-spoke partnering. In the ecosystem, value is self-reinforcing, multiplying as more participants engage with one another. For example, platforms such as Über, the Philips Digital HealthSuite, or Salesforce create an ecosystem of suppliers and users, generating Let's look at an example of an IoT solution aimed at improving agricultural yields. As with all things IoT, in order to accomplish this, multiple partners are involved, essentially forming an ecosystem, perhaps around a specific type of agriculture and perhaps with geographical variations. To deliver the solution, sensors gather information about the nutrients and moisture in the soil. This is combined with weather forecasts and general climate data to deliver information to farmers on their smartphones while they are in the field making decisions about irrigation, planting, use of fertilizer, and harvesting. Not only are there multiple companies, potentially including government agencies, venture capital firms, startups, not-for-profits, universities, or research institutes that all have to work together to deliver the solution, there will be multiple cultural challenges, possibly even some conflicting business models, and potentially competitors involved. SUMMER * 2016 | STRATEGIC ALLIANCE MAGAZINE 21

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q2 2016