Competition intensifies between platform companies as their businesses overlap
Amazon and Google have a shaky history to say the least. Amazon is the only major Android tablet maker outside of China that doesn’t offer Google Play, not to mention other Google services, and in 2015 they stopped selling Google’s Chromecast. Last year, negotiations to find common ground failed. In a, ‘they started it’ playground manoeuvre, Google stopped YouTube from functioning optimally on Amazon Echo Show and Amazon Fire TV. Amazon responded by calling the move ‘disappointing’. While Amazon are hardly whiter than white, Google’s decision to block consumer access to an open website saw the tech giant put its rivalry before customer needs. If tech firms can’t cooperate, it could create a bitter business battleground.
The real casualties of the corporate war
Spats on rotation between technology leaders are nothing new. Tech companies have to compete by their very nature, and technological development has created greater scope for competition in the branches of cloud computing, artificial intelligence, voice based personal assistants, mass ecommerce. . . the list goes on. There are more opportunities than ever for tech companies to collide. However, this competition quickly becomes counterproductive if it has a negative impact on consumers. By sabotaging the YouTube experience on Amazon hardware, Google alienated anybody with an Amazon device who wants access to the site. Likewise, Amazon has weakened its own tablet through the restriction of Google services.
The good news is that other so called rivalries are fostering positive development. Long time opponents Apple and Microsoft, for example, are gradually applying each other’s strengths to their own products and services. Apple wants to make iPads work more like Microsoft’s PCs, and Microsoft wants to mirror the sleek design and performance upgrades of Apple devices. The main aim for both companies is to provide accessibility for their customers, learning from the other’s successes.
As they race to dominate markets, big companies have an unavoidable reliance on one another. This fact could be responsible for the rise of open innovation initiatives. While it’s arguable that this has been motivated by a genuine willingness to work together, Amazon and Google seem to be demonstrating otherwise. In the case of Amazon and Google, efforts to establish an agreement have been unsuccessful. By refusing to work together for the benefit of consumers, Amazon and Google are shooting themselves in the foot. But what does this mean for the wider business landscape?
Calling a truce
Although tech companies rely on one another, they don’t always play nicely. Taking Google and Amazon’s spat as an example, the consequences could be decidedly unhelpful. Instead of sharing knowledge to inform the development of new products, refusing to work together could stunt technological growth. This in turn could see the tech talent race intensify, as companies resort to poaching experts. Ultimately, less focus will be placed on what is best for consumers while more effort will be spent trying to ‘one up’ competitors. It’s the consumer that loses out, which, in the end, means that businesses themselves will suffer.
Unlike previous generations, millennial customers are not as defined by brand loyalty. If a platform doesn’t allow them to access certain sites or services, this will lead to apathy. This is exactly what Google hoped to achieve by sabotaging Amazon, but doing so has tarnished their image. Luckily, big businesses seem to be realising that petty, tit for tat rivalries are far from productive. As such, Google, Amazon, and their numerous competitors will need to call a truce – as difficult as that might be to stomach. This requires a change in corporate mentality already encouraged by the open source and open innovation movements. By adopting this mindset, companies will make the most of their markets.
In increasingly consumer centred markets, cooperation can be far more rewarding than contention. There will always be an element of competition between businesses that operate within the same sectors, but the changing nature of consumer preferences is forcing them to interact in a different way. Customers are no longer accustomed to limited access, which has been especially reflected in millennial refusal to commit to linear services. Arguably, it’s up to big corporations to set a precedent for collaboration. Whether a company is successful in today’s interwoven markets depends on the quality – but also the accessibility – of the services that they offer. Platform companies will have to accommodate their influential adversaries whether they like it or not.
Do Amazon, Google, and other major companies have a responsibility to demonstrate cooperation? Is the open source movement part of a genuine commitment to collaborate? Please share your thoughts.