The leading brands using integrated technology ecosystems to thrive
ReadyTech is a big believer in the power of integrated technology ecosystems for education. When compared with closed, single-vendor platforms, ecosystems have advantages like distributed innovation and speed, ultimately delivering a better offering to education technology customers.
But where’s the proof ecosystems actually work?
The big technology winners are ecosystems
Just about everywhere as it turns out.
Ecosystems are very much winning the day in the world of technology. Led by global technology titans who’ve understood this trend, McKinsey & Company analysis shows that six of the top seven companies in the world by market capitalisation are essentially technology ecosystem companies.
They include all the names you’d be familiar with (and may interact with) on a daily basis: Apple, Microsoft, Amazon, Alphabet (home of Google), Facebook and Alibaba. Their success has made ecosystems a new gold rush for non-tech businesses keen to capitalise on ecosystem potential.
What other brands have used ecosystems to thrive? Here’s three more relatable examples.
Xero is well known to Australia’s small to medium business market as a leading cloud Software-as-a-Service (SaaS) finance system. Used by over 2 million businesses to balance their books, part of its growth has come from acquiring complementary businesses and start-ups (like data capture solution HubDoc in 2018) and integrating their capabilities under its flagship single unified ledger system.
But it’s also a tireless proponent of technology ecosystem integration through its third-party application marketplace. Customers of Xero can access and add a myriad of connected apps across functions like invoicing and jobs, payments, payroll and HR, inventory with a simple click. In offering these apps, Xero has enabled itself to become much more valuable than it ever could alone.
Go1 is Australia’s newly-minted tech unicorn, reportedly cracking the $1bn valuation mark in mid-2021. Positioning itself as the ‘Spotify of corporate education’, it has grown by offering a world of premium learning content that learners need when they need it (usage surged by 500% in the first seven weeks of Covid-19), thereby allowing corporates to finally do online learning well.
Its success is made possible by integration. Rather than forcing subscribers onto its own platform (which they can use if they like), it has embraced integration with the likes of learning management, HR information systems and team collaboration systems (like Microsoft Teams) so employers can deliver learning how they like. In doing so it’s supercharged value creation for everyone involved.
Salesforce claims to be the first company in the cloud computing world to build a business model based on partnerships. Seeing its future success would depend on a vibrant technology ecosystem, it worked to build a community of partners and developers who were all building new applications and ideas on top of Salesforce’s platform while singing from the same customer experience song sheet.
Take its technology partner ecosystem. Consisting of thousands of independent software vendors and developers, it has unlocked innovation by offering App Cloud services – such as tools to speed app building – so the API-first platform supports the creation of connected apps that unlock back-office data. Many third parties have built business offerings through Salesforce’s AppExchange.
What do they have in common?
Xero, Go1 and Salesforce may have some differences in how they have approached the creation and management of their first-class technology ecosystems, but they also have a lot in common.
All these brands have managed to innovate and grow faster by allowing a wider network of technologies to connect and integrate with their primary software platform. Rather than try and do everything themselves (which out of necessity would be a much slower process and deliver a less valuable outcome), they have taken an open ecosystem philosophy to building their businesses in line with the fast-moving external landscape. They have facilitated all this by making it easy for the likes of developers to build connections to their systems through accessible and open APIs.
- Value aggregation
Xero, Go1 and Salesforce have all managed to add more and more value for their customers over time. By enabling third parties to build integrations and complementary connected applications that sit alongside their core software platform, customers benefit from perpetual value aggregation, as they gain access to (and return on investment from) an expanding number of niche software solutions that solve problems for them as their businesses inevitably change and grow.