Home Geography The Internet as a Technology-Based Ecosystem: A New Approach to the Analysis of Business, Markets and Industries
The Trophic Structure of a Hydrothermal Vent Information Communication Technology (ICT) Ecosystem
In order to fully explore and understand the trophic structure of the hydrothermal vent ICT ecosystem (Van Dover 2000), the organisms within the ecosystem will now be analysed in more depth including the nature of their relationships. Ecosystem strategies that are designed to enhance nutrition as well as providing analogical comparisons between the biological and ICT environments will also be considered (Brock 1987).
When analysing the hydrothermal vent (HTV) ecosystem, a categorisation framework in the form of a 2 x 2 matrix can be used to identify the levels of symbiotic and predatory behaviour and the key organisms involved. This is illustrated in Fig. 5.4 (Walton 2017) below. The model maps the nutritional strategies adopted by the main organisms (firms) within the HTV ecosystem (Van Dover 2000).
Fig. 5.4 Nutritional strategies within the HTV ecosystem (Walton: 2017)
In the top left hand quadrant reside the most dominant players in the ecosystem who may also perform the role of ‘keystones’ (Iansiti and Levien 2004). These organisms (firms) are called symbionts because the bacteria (data) upon which they survive exists within their metabolism (Childress, et al. 1991). They are subsequently data-rich with high levels of datafication (Lycett 2013) and many will have built-out their ‘platform stacks’ (Choudary 2015).
Processing data and reproduction is, therefore, natural to the organism and its primary function. The high innovation data-rich Internet platforms and cloud computing companies, plus the high-technology hardware and software firms, are all included in this category and are represented by the tubeworms, mussels and giant clams that reside within the ‘Core Ecosystem Platform’ or within the ‘Extended Ecosystem located close the boundary of the core ecosystem microbial mat at the foot of the high innovation ‘black smoker’ vent chimneys (Gold:1999) The tube- worms are the fastest growing organisms with carbon fixation rates 34 times higher than all other organisms within the ecosystem.
These are the organisms (firms) that have been responsible for developing the foundations upon which the Internet was based during two waves of high innovation (Web 1.0 and Web 2.0) as well as the preliminary wave during which the personal computer (PC) evolved (these waves of innovation were analysed in Chapter 4). Therefore, these organisms are ‘filterers’ not ‘grazers’ (Van Dover 2000).
In the bottom left quadrant of Fig. 5.4 (Walton 2017), are the organisms that engage with the directional flow of bacteria (data) that is discharged from the ‘black smoker’ vent chimneys. The organisms include Zooplankton, Vent Shrimp and Pompeii Worms which feed off the vent bacteria through grazing (although the Pompeii Worm is also an epi- symbiont with bacteria attached to its back).
The vent Zooplankton consists of drifting organisms in the water column which feed off the chemosynthetic bacteria that thrive in the hot sulphide water. The Pompeii worm is an epi-symbiont that lives in the black smoker chimneys. These are compared to Big Data algorithms that search and find patterns in the water columns and black smoker chimneys similar to data patterns in ICT ecosystems. Their ability to successfully navigate in such intense conditions is compared to the realtime streaming analytics performed in Big Data. This is high volume, high velocity and high variety activity (Lycett 2013). Meanwhile, the Vent shrimp with their photo receptors, which swarm the black smoker chimney’s feeding on the bacteria that live there, are compared to the orbital satellites that provide-over-the top (OTT) streaming and wireless connectivity to the organisms on the sea bed i.e. the giant clams and mussels (ICT ecosystem firms).
The left side of the model, therefore, focuses on the high levels of mutualism and symbiosis that exists between the organisms ( firms) and bacteria (data) and also between the organisms (firms) themselves (Martin and Schwab 2013). Although the tubeworms (Internet platforms) are the most data rich, they still require the complementary resources provided by the giant clams. Google, Apple, Amazon, Microsoft and Alibaba still require firms (organisms) to manufacture hardware, run distribution and telecoms networks and to provide finance and complementary technologies i.e. apps. This vital role is fulfilled by the giant clams and mussels that surround the ‘Core Ecosystem Platform’.
If we move to the right of the model, we enter the realm of predatory behaviour (Micheli et al. 2002). In the bottom right quadrant are the main ecosystem predators that include the Blind Crabs, Galatheid Crabs, Zoarcid Fish and Tube Anemones/Dandelion Siphonophores. Since the hydrothermal vent model adopts an ecosystem perspective where multiple firms interact through data to develop platform innovation, the predator classification is seen as a typology of behaviour within the ecosystem (as discussed earlier) rather than being a set of autonomous organisms (Brock 1987). What this means is that the HTV model recognises that not all types of behaviour create shared value and symbiosis (Moore 1996) and sometimes Iansiti and Levien’s (2004) ‘Physical Dominator’ strategies emerge. Therefore, highly mutualistic symbionts (tube worms, giant clams and mussels) will periodically resort to predatory behaviour (Micheli et al. 2002). This will commonly involve acquisitions of new start-up firms or possibly firms that are of a similar size or even larger, to acquire new technologies quickly in order to enter new markets and industries or to defend an existing competitive advantage.
Further examples and analogies include the Blind Crabs, who are capable of ‘Physical Dominator’ strategies (Iansiti and Levien 2004) such as Microsoft’s platform envelopment strategy that was used to usurp Netscape’s advantage during the browser wars of the 1990’s. Zoarcid Fish strategies can be seen as a form of external corporate venturing (Keil 2004) where the technology company acquires a rapidly scaling start-up to quickly access new technology and/or combat a competitive threat. Facebook’s acquisition of Instagram, Whats App and Oculus Rift were designed to retain market share in social networking and to access what could be potentially the next big technological wave i.e. augmented and virtual reality. Google, meanwhile, acquired Android Inc. (2005) the wireless software start-up in order to defend its search engine from mobile competitors such as the Apple iPhone and Microsoft Lumia. Although the companies executing these strategies were symbionts, the need to react quickly to new competitive threats justified the predatory behaviour.
Galatheid Crabs only feed on smaller organisms and debris and animals smaller than themselves (Tunnicliffe and Jensen 1987). These are strategies pursued by comparatively small rather than big players in the ecosystem. In terms of the ICT ecosystem, this would be smaller niche’ firms merging or acquiring other small niche’ firms to achieve higher growth. Currently, there are examples of Internet-based Unicorn firms acquiring, merging or partnering with other Unicorns (Unicorns are private start-ups worth more than $1 Billion dollars) as part ofa consolidation process. This has been triggered by slowing investment from venture capitalists and the need to form more robust asset bases in order to compete against larger players. For example, the two Chinese taxi apps, Didi Dache and Kuaidi Dache merged to form Didi Kuaidi (which has since become Didi Chuxing). This strategy was designed to enhance the taxi apps prospects of competing with Uber in the Chinese taxi and transportation market. Meanwhile, Lyft in the US, Didi Chuxing in China, Ola in India and Grab [Taxi] in South East Asia have also formed a strategic partnership to compete with Uber globally. Uber is currently worth over $62 billion dollars. This strategy also appears to have worked since Uber has recently decided to merge with Didi Chuxing in China due to the extensive losses it incurred while trying to gain market share in the country.
The tube anemones and dandelion siphonophores (jellyfish) are not mobile predators in the same way as the Bind and Galatheid Crabs and the Zoarcid fish but attach themselves to the seafloor and capture animals using stinging tentacles (Burd and Thomson 2000). These organisms are scavengers and can be likened to patent trolls who build war chests of intellectual property which are then used as strategic weapons to sting other companies in high innovation ecosystems (Watkins and Shughart 2013). Technology companies also use patents as strategic weapons against each other within the ICT ecosystem. Google’s main motive for buying Motorola was to gain ownership of a large patent portfolio to protect its Android mobile software platform from litigation. Meanwhile, as Xiaomi, the Chinese smartphone maker, expands into North America and Europe, it has just purchased 1500 patents from Microsoft to defend itself from intellectual property litigation outside its main market, China. Microsoft also receives US$5 dollars in patent royalties from Samsung and XTC for every smartphone they sell. The jellyfish can also be likened to regulatory bodies that might impose restrictions on the behaviour of technology firms potentially undermining revenue streams. Recent legislation against Uber and Airbnb are examples of such actions.
Finally, in the top right quadrant of the matrix are the Planktotrophic Larvae that develop using a hybrid combination of symbiosis and predation. As the larvae are deposited into the water columns, they not only feed off bacteria but also plankton and a range of small and microscopic organisms drifting or floating in the water including diatoms, protozoans, small crustaceans such as copepods and the eggs and larval stages of larger animals.
This can be compared to the incubation stage of startup firms and new products where the firms and products are in their pre-revenue stages of development and feed off venture capital from private investors. As they evolve, they will become symbionts or epi-symbionts and they may also pursue more extensive predatory strategies later on. Examples would include firms that are members of start-up incubators and seed accelerators such as Y Combinator, Tech Stars and Kick Labs. These plankotrophic larvae, by consuming other organisms and animal larvae, deny other startups of support through competition (the opportunity cost of finance) and ‘graze’ on capital from funding sources such as venture capitalists and business angels.
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