Key to Scale: Collaboration, Cooperation, Coopetition
Digital infrastructure is a complex, competitive ecosystem. To maintain the ability to grow and scale and respond to ever-increasing demand, that ecosystem needs to embrace competition, encourage cooperation and, perhaps, take a page from game theory.
This is the second in a series of five blog posts reflecting the top-of-mind issues discussed during the Infrastructure Masons Advisory Council meeting on April 25, 2019.
The idea of working collaboratively within the digital infrastructure industry came up several times during the Advisory Council meeting. The idea was to not only work together as individuals in a professional network but also as competitors cooperating to find solutions to meet growing demand.
Collaboration may be the new competition
Around the country we see organizations putting self-interest on pause in order to work with traditional competitors on a shared objective. Most of these efforts are in the realm of civic projects. Private, public, philanthropic, and non-profit groups gather to fix problems once thought to be unsolvable.
“The idea was to not only work together as individuals in a professional network but also as competitors cooperating to find solutions to meet growing demand.” –Click to tweet
One example of such a collaboration is Hope SF, which pulls together city agencies, the Chamber of Commerce, private and non-profit businesses and residents to transform San Francisco public housing sites.
As another example, the Sustainable Apparel Coalition is a group of companies, organizations and individuals representing the American apparel sector. Encompassing more than 30 brands of shoes and clothing, it brings together retailers, manufactures, NGOs, academic experts, and the U.S. Environmental Protection Agency with one aim: to reduce the social and environmental impact of apparel products around the world. The Coalition has developed a common measure of impact, the Sustainable Apparel Index.
Hardly competitors, but not natural allies either, NASA and Lego have joined forces on the Space Act Agreement. The 3-year collaboration between the toy company and the space agency jointly promotes technology, engineering, and mathematics among science students, encouraging students to work on practical applications in these disciplines.
A rising tide lifts all boats
One lesson from these collaborations is that competitive advantage isn’t necessarily driven by the resources you control, but by those you can access.
“How do we meet the demands of 10x, 100x, 1000x in the timeframes that the industry is demanding?” asked one partner rhetorically. “Collaboration is key to that.”
“How do we meet the demands of 10x, 100x, 1000x in the timeframes that the industry is demanding? Collaboration is key.” –Click to tweet
For the most part, the current environment is not one of collaboration. Several partners talked about the current state of the digital infrastructure industry as one of competition not only between partners, but even between partners and the end users themselves.
One partner said, “four or six companies constitute about 80% of the buying power in the marketplace. So they’re competing with themselves and with their partners.” He added, “We’re competing for the same supply chain, the same talent pools.” And that often causes competitive tensions.
The tension might be healthy if it’s turned into coopetition – a partnership between competitors.
Working together to invest in the future
Coopetition is a business ideology direct from game theory. The aim of coopetition is to move the market from a zero-sum game where a single winner takes all to an environment in which the end result benefits the whole, making everyone more profitable. To succeed in a growing service-based digital ecosystem, more rivals are realizing that they cannot go it alone.
Members expressed consensus around the idea that collaboration or coopetition will be essential.
One partner said, “Infrastructure won’t keep up with demand unless we continue to invest – to build new. To keep up with demand for resiliency you need more paths, lower latency.” Yet “not everyone can afford to spend the capital” – even if it’s customer driven. “Go-to-market strategies just aren’t happening fast enough.”
“Infrastructure won’t keep up with demand unless we continue to invest – to build new.” –Click to tweet
The same partner continued, “providers are collaborating on millions of dollars of build for new paths,” then seeking out partners to co-invest. “Yes we’re competitors, but we’re not everywhere and we can grow better and faster together.”
Collaboration has been successful in other industries, another partner pointed out. “The software industry collaborates well and still respects each other’s intellectual property and deserved compensation.”
Changing culture in a ‘secretive’ industry
Another partner said, “Collaboration is not easy because [the industry] is so secretive.” He said that maybe collaborating in a new emerging market – he suggested Malaysia – would be a good first step toward broader collaboration or coopetition around the world.
Another prime area for coopetition is in global networks. Microsoft and Google famously collaborated on “Marea” a 4,000-mile long high-capacity subsea cable. Indeed, telecommunications firms are no longer the primary interests driving submarine cable construction – now, it’s hyperscale cloud companies and large content providers, according to Submarine Telecoms.
Subsea cable systems are critical to making 10x, 100x, 1000x possible. It’s just one example of an area prime for coopetition. But whether it’s a data center hub in an emerging market or a new subsea cable, coopetition will be the key to scale. And that’s something “Infrastructure Masons should take the driver’s seat on.”
Previous posts in the April 2019 top-of-mind series:
Upcoming posts in the April 2019 top-of-mind series: