The products/vendors page here on PAOSS has a couple of hundred entries currently. We’re currently working on an extended list that will almost double the number on it. More news on that shortly.
The level of fragmentation fascinates me, but if I’m completely honest, it probably disappoints me too. It’s great that it’s providing the platform for a long-tail of innovation. It’s exciting that there’s so many niche opportunities that exist. But it disappoints me because there’s so much duplication. How many alarm / performance / inventory / etc management tools are there? Can you imagine how many developer hours have been duplicated on similar feature development between products? And because there are so many different patterns, it means the total number of integration variants across the industry is putting a huge integration tax on us all.
Compare this to the strength of duopoly markets such as:
- Microsoft / Apple (PC operating systems)
- Google / Apple (smartphone operating systems)
- Boeing / Airbus (commercial aircraft)
- Visa / Mastercard (credit cards / payments)
- Coca Cola / Pepsi (beverages, etc)
These duopolies have allowed for consolidation of expertise, effort, revenues/profits, etc. Most also provide a platform upon which smaller organisations / suppliers can innovate without having to re-invent everything (eg applications build upon operating systems, parts for aircraft, etc).
Then I think about the impediments to achieving drastic consolidation through mergers and acquisitions (M&A) in the OSS industry.
There are opportunities to find complementary product alignment because no supplier services the entire OSS estate (where I’m using TM Forum’s TAM as a guide to the breadth of the OSS estate). However, it would be much harder to approach duopoly in OSS for a number of reasons:
- Almost every OSS implementation is unique. Even if some of the products start out in common, they usually become quickly customised in terms of integrations, configurations, processes, etc
- Interfaces to networks and other systems can vary so much. Modern EMS / devices / systems are becoming a little more consistent with IP, SNMP, Web APIs, etc. However, our networks still tend to have a lot of legacy protocols to interface with our networks
- Consolidation of product lines becomes much harder, partly because of the integrations above, but partly because the functionality-sets and workflows differ so vastly between similar products (eg inventory management tools)
- Similarly, architectures and build platforms (eg programming languages) are not easily compatible
- Implementations are often regional for a variety of reasons – regulatory, local partnerships / relationships, language, corporate culture, etc
- Customers can be very change-averse, even when they’re instigating the change
By contrast, we regularly hear of Coca Cola buying up new brands. It’s relatively easy for Coke to add a new product line/s without having much impact on existing lines.
We also hear about Google’s acquisitions, adding complementary products into its product line or simple for the purpose of acquiring new talent / expertise. There’s also acquisitions for the purpose of removing competitors or buying into customer bases.
Harder in all cases in the OSS industry.
Tomorrow we’ll share a story about an M&A attempting to buy into a customer base.
Then on Thursday, a story awaits on a possibly disruptive strategy towards consolidation in OSS.