FEED THE WEB FIRST

Individual allegiance moves away from firms…

…and toward networks and network platforms.

Are you Windows or are you Mac?

This shift to network loyalty makes the potential of any network we might want to join a key issue. Is the network waxing or waning? Is the upside potential meager or tremendous? Is the network open or closed?

When given the choice between closed or open systems, consumers show a fierce enthusiasm for open architectures. They choose the open again and again because an open system has more potential upside than a closed one. There are more sources from which to recruit members and more nodes with which to intersect.

Identifying the preferred network to do business in is now a major chore for firms. Because more and more of a firm’s future lies in its networks, firms must evaluate a network’s relative open- and closedness, its circulation, its ability to adapt. Consultant John Hagel says, “A web limits risk. It allows companies to make irreversible investments in the face of technological uncertainty. Companies in a web enjoy expanding sourcing and distribution options, while their fixed investment and skill requirements fall.”