TMCnet Feature Free eNews Subscription
March 04, 2013

What Business are We Really In?

By Gary Kim, Contributing Editor

In a loosely-coupled ecosystem such as the “Internet,” it sometimes is quite hard to clearly delineate “what business” a company is in. Consider the upcoming test of PowerKiss wireless charging at a number of McDonald’s restaurants in Europe in 2013.

The test will allow users to recharge their Qi-capable mobile phones at a limited number of McDonald’s restaurants in some selected countries.

The technology is fully integrated into the table and completely invisible. Customers with a Qi wireless charging enabled device can simply place it on the table to charge.

Customers who do not have Qi capability will be able to use a “PowerKiss Ring,” which plugs into any phone and makes it immediately ready for wireless charging.

Here’s the tricky part about answering the question “what business are you in?” The thing about loosely-coupled ecosystems is that although various participants might provide some function within an ecosystem, they may do so without formal business relationships with other ecosystem participants or direct revenue models based on relationships with end users or other ecosystem partners.


Image via Shutterstock

That, in fact, is what shakes telecom service providers. All the revenue and value created by application providers occurs without a formal business relationship with the access provider.

But that loosely-coupled relationship exists both for McDonald’s (a Wi-Fi hotspot provider) and Qi (wireless charging). Neither Qi nor McDonald’s will directly charge end users for use of either amenity.

So you might say neither company is in the Internet “business,” in the common and ordinary sense that any person might say they are in a specific line of work.

In other words, McDonald’s would say it is in the hospitality, restaurant or meals business, since that is its direct revenue stream. Qi might say it is in the power systems or wireless charging  business. But both operate as part of the Internet ecosystem.

That sort of thing is very common these days. Google (News - Alert) would say it is a technology company, even if people know it as a firm providing search.

Google supplies applications, hardware, software and managed services, so it is harder to describe Google these days. But Google also makes most of its money from advertising, even if Google would not say it is in the advertising business.

And that is the point. It is increasingly hard to separate a functional role in the Internet ecosystem from the actual direct revenue sources a participant earns. McDonald’s is in the restaurant business. Qi is in the wireless charging business. But both are parts of the Internet ecosystem as well, even if no direct revenue is earned that way.

As time passes, we might see many other ways Internet access providers, device suppliers, application providers and over the top service providers use indirect revenue models. ISPs will not like some of those new developments, either.

The point is that people often forget that the “open systems interconnect” (OSI) model, otherwise simply known as the “layered” approach to the “software stack,” illustrates business models, not just the ways software and ecosystem functions are separated.


Edited by Brooke Neuman
» More TMCnet Feature Articles
Get stories like this delivered straight to your inbox. [Free eNews Subscription]
SHARE THIS ARTICLE

LATEST TMCNET ARTICLES

» More TMCnet Feature Articles