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It's Not Just the Product, It's the Ecosystem

Arthur Hanson

Well-known member
Products no longer can exist in isolation for now they have to be sold as a key part of an ecosystem that provides value both tangible and intangible to the user.
The broader and deeper the ecosystem the more value it offers just by having a single learning curve, increased security and compatibility across product lines in both hardware and software. Apple, Google, Facebook and Amazon are the current winners, but must aggressively add to their ecosystems either organically or through acquisitions. The ecosystem, physical and virtual, has only two choices, to be growing or dying. Any new products either have to create at least a highly specialized ecosystem or integrate into a larger one out of the gate and preferably the later. The ecosystem is now the product and the age of products existing in isolation is over. Up and comers are Netflix and others that must either become part of a much larger ecosystem or face threats from the larger incumbents. Alliances and partnerships will be critical even for the largest players. Even cars and almost everything else will be sold as part of an ecosystem. The days of a stand alone product are dying fast and will soon be relegated to small corners of huge markets where they will be in constant danger. Larger ecosystems will act as vacuum cleaners, sucking up everything in their path for there are to many choices otherwise to achieve scale needed to be economically viable to use in cost, time and resources. This is why the foundry model now dominates the semi sector over the old line end product producers and will only extend that dominance.
Comments or thoughts on other new business and technology models to add to this welcome and wanted.
 
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Using Intel as an example, while selling processors to HP, DELL, Lenovo, Asus, and Acer for them to make desktops, laptops, and servers, Intel is also making and selling servers under Intel's own brand. Actually server product division is the only division within Intel still growing fast with huge profit.

Yes, there is no moral obligation for Intel not to compete against its own customers. But imagine this scenario, Intel salesman A spent a whole day try to persuade HP to buy more Intel Xeon server processors for a new HP Proliant server model. On the same day, Intel salesman B is working hard to convince eBay CIO to buy more Intel servers because those Intel made servers are much faster than HP Proliant servers.


Is Intel helping to enhance the Intel ecosystem or Intel is destroying it?

I have some comments about the ecosystem in another thread.

https://www.semiwiki.com/forum/f293...ntage-explained-7871-post29425.html#post29425

A real ecosystem is not a marketing gimmick. A real ecosystem is a long term commitment and mutually beneficial relationship. By looking into a section of Q&A of 3Q2015 Xilinx conference call, I hope people can sense what kind of the relationship between TSMC and Xilinx is. Can we expect DELL, Lenovo, HP, Asus, or Acer to say something like this to support Intel when their own products are in trouble?



Ambrish Srivastava (Analyst - BMO Capital Markets):Hi, thank you. Moshe, I just had a clarification on the FinFET comment you made. Is this an issue emanating from the difficulty, in your opinion, TSMC is having or is it coming from the Xilinx side? A just a quick follow-up -- what is the timing from tapeout to when we should expect production volume? Thank you.

Moshe Gavrielov (CEO):
There are no issues with TSMC. They have had numerous tapeouts already. They're giving us full support. The design, whenever you encounter a new generation of product, tends to unearth problems that you did not anticipate, and, as a result, the closing of all of these issues is taking a little longer, plus the challenges related to designing for FinFET transistors are more significant. So, it is not a TSMC challenge or issue at all. It's just our ability to finish the design with their support.


Source: Xilinx (XLNX) Earnings Report: Q3 215 Conference Call Transcript - Pg.6 - TheStreet
 
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