Building Business Ecosystems Through an Open Edge (Part Two)

In part one of this series, I walked through various approaches to ecosystems and highlighted how business value tends to find a natural equilibrium across stakeholders. In this second installment, I’ll walk through the importance of an open edge for scaling ecosystems and realizing the true potential of digital transformation, as well as providing some tips on building ecosystems that I’ve picked up over the past years.

Imagine if the overall internet was built as a closed ecosystem, controlled by a small set of organizations, much less one. Of course, there are browsing restrictions placed at a company level and in some countries, but the internet simply wouldn’t have made the same massive impact on society without fundamental openness and interoperability.

All data is created at the edge, whether it be from user-centric or IoT devices. A few years ago, the number of devices on the internet surpassed the global population, and the growth for IoT devices is expected to continue at an exponential rate. This will not only unlock new paths to value but also necessitate an increase in edge computing.

However, as it turns out, the term “Internet of Things” is actually a bit of a misnomer. It’s really about a series of increasingly connected Intranets of Things. Ecosystems will get increasingly larger and more interconnected as the value to do so exceeds the complexity and risk. So how do we carry this out at scale?

When deploying applications closer to devices in the physical world, outside the confines of a traditional data center, there are some unique challenges to consider. Edge and IoT solutions inherently require a diverse collection of ingredients and expertise to deploy. Over the past five years, the emerging market has attempted to address this fragmentation with a dizzying landscape of proprietary platforms—each with wildly different methods for data collection, security and management.

That said, having hundreds of closed, siloed platforms and associated ecosystems is definitely not a path to scale. As with the internet itself, it is important to have an open, consistent infrastructure foundation for IoT and edge computing, and from there, companies can decide how open or closed they want to build their business ecosystems on top.

The diversity of the IoT edge makes it impractical to develop one catch-all standard to bind everything together. Open-source software frameworks are an excellent way to bridge together various ingredients, unifying rather than reinventing standards, accommodating legacy installations, and enabling developers to focus on value creation.

In the end, the winners will be the ones creating differentiated value through their domain knowledge, building necessarily unique software and hardware and offering great services—not those that are reinventing the middle over and over again. AI models for common tasks such as identifying a person’s demographic, detecting a license plate number or determining if an object is a water bottle or weapon will be commonplace. Meanwhile, there will always be room to differentiate with AI when a specific industry context is in play.

The Holy Grail of Digital is selling or sharing data, resources and services across total strangers, all while maintaining privacy on your terms. This is the ultimate scale factor, but we need to turn to technology for help because it simply isn’t feasible to take people out to dinner fast enough one by one to build the necessary trust relationships.

Consumers are often comfortable pledging allegiance to specific brands and giving up a little privacy as long as they trust the provider and get value. However, to build more complex ecosystem relationships that span private and public boundaries at scale, we need open interoperability and to ensure that no single entity owns the trust.

As such, we also need to collaborate on a technology foundation that automates the establishment of trust as data flows across heterogeneous systems. We’re seeing the industry increasingly step up here, from distributed ledger efforts like IOTA and Hyperledger that provide smart contracts to the Trust Over IP Foundation and the emerging Project Alvarium, which aims to build out the concept of data confidence fabrics by layering trust insertion technologies with a system-based approach. Both the ToIP Foundation and Alvarium are focused on facilitating trust in both machine-generated data and across human relationships.

While these efforts don’t replace the need to build business relationships (and take people out to dinner!), they will provide the necessary acceleration. Moreover, beyond helping us scale complex ecosystems, these tools can also aid in combating the increasing issue with deepfakes and ensuring ethical AI solutions, in addition to accelerating workload consolidation at the edge and dealing with regulatory requirements like GDPR… but these are blog topics for another time!

When I started building the IoT ecosystem with the team at Dell back in 2015, it was clear that the market was going to go vertical before going horizontal. This is a typical pattern in any new market, and proprietary offers often get the initial traction, while solutions based on an open foundation always win in the end when it comes to sheer scale.

So, our ecosystem strategy starting in 2015 was to go super broad before going deep, partnering widely and enabling the “cream to rise to the top.” Sure enough, the partners with the most initial traction were laser-focused on one use case. Meanwhile, the horizontal “peanut-butter platforms” were stalling. Case in point, if you do a little bit of everything, you rarely do one thing really well.

But it was really about these vertically-focused platforms’ domain knowledge that resonated with a specific customer need and desired outcome. They built their technology platforms to get to data, but their real value was that domain knowledge. Over time as we get to a more consistent, open foundation for Edge and IoT solutions, these providers will either need to pivot to being more like system integrators or build differentiated software and hardware. So, in 2017 we purposely switched from going broad to being more deliberate in partnerships, focusing more on partners who realized the importance of separating domain knowledge from the underlying technology foundation and helping with matchmaking across the partner landscape.

Deploying IoT and edge computing solutions takes a village. It’s important to establish an entourage of partners with a “go-to dance move” rather than working with those trying to do too much and not doing anything particularly well.

Five years have passed, and a lot of providers have felt the pain of trying to own everything and have since realized the importance of having focus and establishing meaningful partnerships.

(Disclaimer: The author is a VP of Ecosystem, ZEDEDA)