Ecosystems Are In, Vertical Integration Out

The content and communications businesses these days are fundamentally different from those same businesses of 30 years ago in one fundamental way. Unlike the situation several decades ago, when value almost completely could be controlled by vertically-integrated providers, value now is derived from loosely coupled ecosystems.

In other words, where a telco in the past could control and vertically integrate every part of the “voice delivery” business, these days network-delivered applications with high value can be delivered to end users (both business and consumer) without any formal business relationship with an access provider.

Much the same is becoming true for just about every other type of content or application you can think of, the phrase “over the top” nicely capturing the dynamics.

These days, telcos, cable companies and media firms alike operate in markets where value is supplied by many different partners. “Telecom ecosystems were easier to define in the days of monopolies and nationalized postal, telegraph and telephone organizations (PTTs),” says Jörgen Lantto, who works with systems management within multimedia at Ericsson. “Nowadays, they include everything from developers and devices to Google and billing systems.” Partners are key.

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