Monday, February 27, 2023

Wider API Use Could Support Either Horizontal or Vertical Business Models

A layered business model might be viewed as a value chain turned 90 degrees. Where a value chain is depicted horizontally, with stages leading to end user purchase of products, so a layered business model resembles a value chain turned 90 degrees to show that layers of function each contribute to a complete business model. 


source: McKinsey 


The thing about value chains is that they feature distinct roles. In principle, those roles can be vertically integrated or remain horizontally distinct. Decentralization or virtualization do not necessarily alter the type of integration. 


source: Blockchain Hackathon 


Wholesale business models, on the other hand, do affect integration patterns, as they are based on a horizontal model: wholesalers supply essential network functions, but customer-facing operations are typically disaggregated. 


Many other potential innovations might shift vertically-oriented telcos in a more horizontal direction, but not necessarily. 


GSMA Open Gateway is a new framework of universal network Application Programmable Interfaces (APIs) designed to provide developers with access to operator network features. That could, in principle, lend itself to new horizontal roles, but might also simply add a revenue stream to an existing vertical model.

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