Teke

s R

evie

w 2

74/2

010 Business Dynamics and

Scenarios of ChangePetri Ahokangas, Miikka Blomster,

Lauri Haapanen, Matti Leppäniemi, Vesa Puhakka, Veikko Seppänen & Juhani Warsta

10

3

Petri Ahokangas, Miikka Blomster, Lauri Haapanen, Matti Leppäniemi, Vesa Puhakka, Veikko Seppänen, Juhani Warsta

Business Dynamics and Scenarios of Change

affecting business models and value creation within the ICT sector

Tekes Review 274/2010Helsinki 2010

OULU BUSINESS SCHOOLmore value for your investment

4

Tekes, the Finnish Funding Agency for Technology and Innovation

Tekes is the main public funding organisation for research and development (R&D) in Finland. Tekes funds industrial projects as well as projects in research organisations, and especially promotes innovative, risk-intensive projects. Tekes offers partners from abroad a gateway to the key technology players in Finland.

Tekes programmes – Tekes´ choices for the greatest impact of R&D funding

Tekes uses programmes to allocate its financing, networking and expert services to areas that are important for business and society. Programmes are launched in areas of application and technology that are in line with the focus areas in Tekes’ strategy. Tekes programmes have been contributing to changes in the Finnish innovation environment for twenty years.

Copyright Tekes 2010. All rights reserved. This publication includes materials protected under copyright law, the copyright for which is held by Tekes or a third party. The materials appearing in publications may not be used for commercial purposes. The contents of publications are the opinion of the writers and do not represent the official position of Tekes. Tekes bears no responsibility for any possible damages arising from their use. The original source must be mentioned when quoting from the materials.

ISSN 1797-7339ISBN 978-952-457-505-8

Cover picture: Pasi HyttiLayout: DTPage Oy

5

This document discusses the dynamics and scenarios of change within the ICT sector in five areas of the ICT business ecosystem: consultants, application software developers, infrastructure software developers, system and infrastructure integrators, infrastructure and application service providers, and hardware developers. Specifically, the focus is on the change in business models and value creation within the ICT ecosystems. Earlier work by Tekes has lead to the identification of hundreds of business drivers, limitations and challenges, that could be summarized in the form of two ICT scenarios – verticals (positions in sector-specific or segment-specific value chains) and horizontals (positions in cross-sectional value chains and customer groups). Based on this earlier work, two ma-jor areas of change were identified to affect business models and value creation. The first of these was consumers’ a) diverging media landscape, especially in the form of social media and social data, and b) the changing role of information, contributing to consumers’ attention divergence. Secondly, even with converging technologies (networks, devices) and industries, cloud computing seem to be changing the rules, business models and value creation mechanisms of the ICT businesses. Based on 21 in-depth interviews within the ICT sector, the results indicate that for consultants it is the horizontals that provide new opportunities, e.g., in packaged services and cross-industry integra-tion. For application software developers the horizontals might provide opportunities in the form of new services utilizing advertising, context awareness, or data intensiveness. Infrastructure software developers seemed to be hoping that the business shall remain within the existing verticals by see-ing mobile and fixed businesses as one. For system and infrastructure integrators the opportunities might be found in horizontals; service delivery platforms and content aggregation/access services. For infrastructure and application service providers, content or access to it appeared as an opportu-nity, but also diversification seemed to provide alternative opportunities, especially in the business-to-business sector. For hardware providers the new opportunities might be found in the short-cuts connecting directly verticals with not-so-apparent horizontals.

As a summary, the research indicates that divergence and fragmentation of the consumers’ media landscape is overriding the consequences of convergence all over the ICT sector. Access, identification, and utilization of user data is increasingly becoming the source of value creation and competitive advantage. Social media and its phenomena change industry structures and business models in unpredictable ways, contributing to the deteriorating of purely horizontal or vertical busi-ness models and thus making ICT companies to look for value chain short-cuts, sidetracks, and op-portunities across traditional segmentation strategies.

Abstract

6

Contents

Abstract...................................................................................................................................................5

Part 1: Introduction.......................................................................................................................9

Purpose and objectives of the research.....................................................................11

The theoretical starting points of the research....................................................11

Research methodology...........................................................................................................13

Part 2: Initial analysis................................................................................................................16

Industry analysis...........................................................................................................................16ICT.technology.convergence......................................................................................................16

Analyzing.industries..........................................................................................................................17

Industry.environment.and.structure.......................................................................................23

Conclusions.from.industry.analysis..........................................................................................30

Business ecosystem analysis...............................................................................................31Consultants.............................................................................................................................................31

Application.software.developers..............................................................................................33

Infrastructure.software.developers..........................................................................................35

System.and.infrastructure.integrators....................................................................................35

Infrastructure.and.application.service.providers.............................................................36

Hardware.developers........................................................................................................................37

Other.types.of.actors........................................................................................................................38

Conclusions.from.the.ecosystem.perspective..................................................................38

Part 3: Secondary analysis.................................................................................................41

Network analysis: social networks in convergence...........................................41Introduction............................................................................................................................................41

Theoretical.approach:.Social.networking.nature.of.business..management.in.the.new.business.creation......................................................................41

Empirical.results:.Network.action.in.the.development.of..new.business.under.dynamic.circumstances...................................................................44

Discussion................................................................................................................................................46

Resource analysis.........................................................................................................................48The.resource-based.view...............................................................................................................48

Indicative.results.of.the.resource-based.analysis............................................................49

7

Part 4: Conclusions .....................................................................................................................51

Introduction ....................................................................................................................................51

The trends themselves ............................................................................................................52Media landscape and its connection with convergence ..........................................52

Social media ..........................................................................................................................................55

Some remarks regarding the trends .......................................................................................56

Towards the business models of the future ...........................................................57

Strategies used within the ICT sector .........................................................................58

Theoretical conclusions and Implications for future research ................61

References .........................................................................................................................................62

Tekes Reviews in English .......................................................................................................66

8

9

Research on business organizations has started to show signs of shifting the focus from the management of exist-ing companies more efficiently to the creation of new businesses or business models (Christensen 1997; Ghoshal, Bartlett and Moran 1999; Hamel 1998; McGahan 2004). This new line of in-quiry criticizes the view of the modern time, which sees businesses to be best developed and renewed by planning and controlling existing businesses and hoping that somehow ‘ruling the game will make things click’ (e.g. Por-ter 1985). These studies argue that the reality of the post-modern knowledge economy is far too complex, turbu-lent, ambiguous and vague to be kept under control (Hamel 1999). The chal-lenge companies, and whole econo-mies, face today is not how to achieve a competitive equilibrium position but how to break equilibriums and to live in constant “state” of disequilibrium (Carls-son and Eliasson 2003).

Starting from the above consid-erations, the ICT industry is not an exception of this post-modern devel-opment. The ICT sector in general is currently facing the consequences of the fast changes and maturation of the industry in all its business sectors and major markets. One of the key drivers in this development is the technologi-cal convergence taking place within the industry. The starting point to this

piece of research is within the Tekes originated GIGA – Converging Net-works programme, and especially its work group number 4 activities. The Tekes/GIGA work group started a ma-jor effort to create a coherent picture of convergence and the change driv-ers and consequences of convergence on Finnish ICT businesses. The results of this original work can be found on the Tekes web site www.tekes.fi/giga. In this report our aim is not, however, to cover the findings and conclusions of the GIGA work group, i.e., the drivers of change and the scenarios of change for the ICT industry, but rather use these findings and conclusions as the starting point for defining the research questions and methodology set forth for this particular report.

Over the past few years, the busi-ness model concept has generated growing interest among academics and practitioners. It has been particu-larly popular among e-businesses and with research on e-businesses (Tim-mers, 1998; Afuah and Tucci, 2001; Amit and Zott, 2001; Applegate, 2001; Cheng et al., 2001; Rayport and Jaworski, 2001). However, the empirical use ofthe con-cept has been criticized for being un-clear, superficial, and not theoretically grounded (Porter, 2001). As a cursory review of the literature is likely to reveal, numerous definitions of business mod-els have been proposed by academics

and practitioners alike. While some of these conceptualizations are similar, there is definitely a lack of consensus as to the most appropriate way in which this emerging phenomenon should be defined. This may be due to the fact that the business models are concep-tualized from seemingly incongruent perspectives (e.g. e-business, strategy, technology, and information systems). Indeed, the viewpoint of each author always drives term definition; by peer-ing through different lenses, authors are seeing different things.

For a systematic study of busi-ness models, we need to define busi-ness model and distinguish business model’s critical elements, i.e. unique building blocks or components. In an attempt to help managers better un-derstand business models, Shafer et al. (2005) conducted an extensive review of the extant literature. Overall, their literature review yielded 12 distinct definitions of business model. The au-thors also carried out a detailed analysis of the identified conceptualizations to identify and classify common elements and recurring themes among them. The analysis identified 42 business model elements that were classified into four primary categories: strategic choices, the value network, creating value, and capturing value (see Figure 1). Based on the review and analysis of business model elements, Shafer

Part  1Introduction

10

et al. (2005) proposed that the busi-ness model is best conceptualized as “a representation of a firm’s underlying core logic and strategic choices for creat-ing and capturing value within a value network.”

By the same token, Hamel (2000) defines business model as a business concept which includes 1) customer interface, 2) core strategy, 3) strategic resources, and 4) value network. Broad-ly speaking, common to all definitions of business models is an emphasis on how a company makes money, i.e. cre-ating and capturing value. Thus, a fun-damental issue that a business model should describe is the way in which the key business processes generate revenue. As indicated by Rajala et al. (2001) “value creation processes describe who are in it and what they do and value appropriation processes describe what’s in it for the company.” Therefore, it is im-portant to emphasize that a business

model is not a strategy. While a strategy refers to an ‘‘overall plan for deploying re-sources to establish a favorable position’’ (Grant, 1998, p. 14), a business model does facilitate analysis, testing, and validation of a firm’s strategic choices. Stated differently, a business model is a practical action plan designed to fit into a specific market situation in order to execute strategic plans (Rajala et al., 2001).

Another relevant question related to the business model is that what cre-ates added value to a customer. Amit & Zott (2001) argue that value added emerges from novelty, efficiency, com-plementarities, and ties. Novelty can be measured as new business structures, new content or as new players. Effi-ciency results from search costs, size of the searching area, availability of information, simplicity, speed of search and scale economies. Complementa-rities can emerge between verticals

and horizontals, from the resources required, between technologies, and between activities. Ties between the buyer and the seller can stem from changing costs, for example due to standards, tailoring, trust or loyalty pro-grams and from the direct or indirect network effects.

As the objective of the whole re-search project is to clarify the business context and its effects on business models and corresponding value crea-tion mechanisms, there is a need for a combination of compatible theoreti-cal approaches. In this research they include 1) the business model and value creation perspective described above, 2) the dynamic resource-based perspective, 3) the network perspec-tive, 4) the business ecosystem per-spective, and 5) the industry analysis perspective. These will be discussed in a more detailed way in the following chapters.

Customer (Target Market, Scope)Value PropositionCapabilities / CompentenciesRevenues / PricingCompetitorsOutput (Offering)StrategyBrandingDifferentiationMission Cost

Financial AspectsProfit

SuppliersCustomer InformationCustomer RelationshipInformation FlowsProduct / Service Flows

Resources / AssetsProcesses / Activities

Components of a Business Model

Strategic choices Value Network

Create Value

Capture Value

Figure. 1. The components of a business model. (Rajala 2001)

11

Purpose and objectives of the research

This research rests on the premise that a constant renewal process is taking place in the highly turbulent and dy-namic ICT business environment. In this kind of business environment predic-tions and assumptions based on ear-lier experience or prior research do not necessarily explain or help us to under-stand what is going to happen in the business environment and what kind of strategies or business models should be used in the future (e.g., Sarasvathy 2001). We believe that converging net-works have created a business environ-ment where both vertical and horizon-tal changes are dynamic and unstable to a degree that companies are simply forced to develop new business mod-els and ways of creating value. Based on the above argumentation, the gen-eral purpose of this research project is to describe and understand the drivers behind the development of business models and value creation in com-panies within the ICT sector. More specifically, the aims of the project are to study (1) the technological impacts to vertical integration needs, strategies in vertical integration, and business models in vertical integration, (2) the emergence, divergence and heteroge-neity of different company strategies and business models depending on their level of horizontal integration and its impact to those, and (3) the value networks in the companies that are dealing with the converging networks. The conceptualization of the horizontal and vertical businesses adopted in this research project reflects the conceptu-alization adopted within earlier Tekes/GIGA related research streams.

Based on the research purpose and objectives stated above the follow-ing questions can be placed in the core of this report:1. What could be the core elements

and perspectives that could be used to capture and explain change with the ICT companies?a. In order to answer the above

question, what kind of tools, per-spectives and theories we can use to explain and understand the ICT sector and the compa-nies in it?

2. What are currently the most impor-tant drivers of change if the change scenarios developed by the GIGA work groups are used as a starting point for research?a. In order to answer the above

question, what kind of conse-quences the identified drivers and scenarios have on the com-panies, their business models and value networks?

3. What are the extreme scenarios for ICT companies in practice and how we can identify their consequences for companies?a. And finally, in order to answer

the above question, what kind of business models and value networks could help companies succeed in their particular busi-nesses?

To process by which we aim to answer these questions is two-fold: first, we start by an initial analysis where the focus is in the data analysis, specifically based on interviews of key informants from the ICT industry reflected against selected theoretical starting points. Secondly, we aim to conclude with a coherent view of the combined inter-

views and selected theories, and come up with conclusions emerging from the triangulation of the interviews, theoretical tools, and secondary data on the ICT sector.

The theoretical starting points of the research

Due to the rather practical questions set forth for the research, the theo-retical starting points of the research consist of a variety of theories and per-spectives relevant in understanding and analyzing business environments and business contexts, business mod-els, and value creation in networks. The selected theoretical starting points for this research were the following: • Business models and value crea-

tion (e.g., Hamel, Prahalad, Ham-brick & Fredrickson, Amit & Zott, Kim & Mauborgne)

• Resources and dynamic compe-tences (e.g., Barney, Amit & Schoe-maker, Peteraf, Grant)

• Networks and value creation (e.g., Axelsson & Easton, Håkansson, Sne-hota, Möller)

• Ecosystem view (e.g., Messer-schmitt and Szyperski, Seppänen & Warsta)

• Industry and Industry competition (e.g., Caves & Baines, Porter, Buel-ling & Woerter)

The above mentioned theoretical start-ing points enable us to approach the ICT sector form viewpoints that pro-vide us with complementary perspec-tives and insight into the drivers of change and scenarios as well as busi-ness models and strategies used within the ICT sector. Our primary target is to be both practical and scientific in this

12

research and we hope to contribute to both developing business as well as concepts and theories used within business research.

The theoretical approaches used in the research will be briefly presented in the following chapters of the report. However, the same way as business model is at the core of this research, also the network thinking utilized in this research requires a short primer as it plays a crucial role in value creation.

Strategic networks has wide vari-ety of different definitions, but maybe the most abstract one is the Håkans-son’s and Ford’s (2002, 133); “structure where a number of nodes are related to each other by specific threads”. Further, Iacobucci and Hopkins (1992, 5) have defined a business network much simi-larly as a “composite of a larger number of actors and the pattern of relationships that ties them together.” Thorelli (1986, 38) instead has brought out that a business network can also be seen as an intermediary or alternative form of governance between pure markets and pure hierarchies, where “two or more firms which, due to the intensity of their interaction, constitute a subset of

one (or several) market(s).” Generally the definition of the networks goes that the networks between organizations are constructed from the linked rela-tions of the actors (Håkansson and Sne-hota 1995, 7-10). The importance of the research of networks comes from the point that by defining the surrounding network, the actor or the organization can recognize the other relevant actors, resources, actions, complexity, continu-ity and informality of the network (e.g. Håkansson and Johansson 1992, 28-30; Håkansson and Snehota 1995, 7-10).

There is rich field of studies made from the business networks. Miles and Snow (1984; 1986) and Snow et al. (1992), for instance, discuss about dynamic networks that often emerge around hub or lead firms and typically rely on a core skill like manufacturing, R&D, design, assembly, or brokering. Achrol (1997), for example, has identi-fied three different kinds of networks: 1. Vertical market networks or market-

ing channel networks, which corre-spond to the traditional supplier-manufacturer-distributor channels organized around focal organiza-tions,

2. Inter-market or concentric net-works, which are networked allianc-es among firms operating in a vari-ety of industries and are character-ized by their dense interconnec-tions in resource sharing, strategic decision making, culture and iden-tity, and collective action (e.g. the Japanese keiretsu), and

3. Opportunity networks, which are market-driven networks of organi-zations formed around a marketing company that specializes in collect-ing and disseminating market infor-mation, negotiating, coordinating projects for customers and suppli-ers, and regulating product stand-ards and exchange behaviors with-in the network.

The focus in the current study is on strategic networks. Jarillo (1988, 32) describes strategic networks as “long-term, purposeful arrangements among distinct but related for-profit organiza-tions that allow those firms in them to gain or sustain competitive advantage vis-à-vis their competitors outside the network. “Further, a “strategic network can be described as the total pattern of

Business models/ value creation within

convergence

Researchquestion 1

Researchquestion 3

Researchquestion 2

Theories on industrydevelopment

Business ecosystem theory

Network theory

Dynamic resource-based theory

Figure. 2. The role of background theories in answering to the research questions.

13

relationship within a group of actors, striving to reach a common goal” and the network “is planned, has borders and the actors are known to each other” (Klint and Sjöberg 2003, 409-410).

Möller and Rajala (2007) iden-tify seven different networks. Vertical and horizontal demand-supply net-works can be regarded as established networks whereas business renewal (benchmarking) networks and cus-tomer-solution (projects and VARs) networks can be regarded as renewal networks. Demand-supply and re-newal networks can be characterized as stable value-creation networks. The only type of network potentially lead-ing to dynamic value creation is emerg-ing networks that comprise application networks (for application develop-ment), standardization networks (such as 3GPP), and innovation networks.

Järvensivu (2007, 16) has defined strategic business network as inten-tionally developed and managed inter-organizational cooperation between three or more organizations for the pursuit of mutually beneficial strategic business goals. His definition is built largely on the ideas presented by Jarillo (Jarillo 1988), Gulati et al. (2000), Möller et al. (2005), Möller and Svahn (2003), and Klint and Sjöberg (2003). Within that definition, the present study con-siders the following as the key charac-teristics of a strategic business network: 1. A strategic network is defined by in-

tentionality: strategic networks are intentionally created, developed, maintained, and managed (Möller and Svahn 2003).

2. The existence of a strategic net-work is motivated by the pursuit of strategic business goals and bene-fits, which means that a strategic

network exists in order for the net-work members to obtain a better competitive stance over competi-tors outside the network. The goals of the network may be more or less explicit.

3. A strategic network exists to pur-sue shared business goals that are mutually beneficial – although indi-vidual network members may also pursue non-shared goals through network cooperation as long as these do not contradict the net-work’s shared goals.

4. A strategic network strives to be defined by fairly clear boundaries, meaning that its members should try to gain a mutual understanding of the organizations that belong and do not belong to the network (Klint and Sjöberg 2003). Without clear boundaries, it will be hard for net-work members to agree on shared goals and, in general, network man-agement will grow difficult.

5. A strategic network often has at least one key player (i.e. “a hub”) that often takes the initiative in devel-oping and managing the network, as well as other players that have a less visible or less powerful role in the network. Sometimes there may be several, more or less equal key players. Still, this does not necessar-ily mean that these “hubs” have to-tal control of the network in terms of development and management.

6. A strategic network usually includes several for-profit organizations. However, such a network may also include one or several non-profit or-ganizations, such as universities, re-search institutions, or non-profit as-sociations. This concludes the dis-cussion on the concept of strategic

networks. In the next section this concept is compared with anoth-er closely related concept: strategic collective-action networks. (Järven-sivu, 2007, 16-17)

Research methodology

By answering these research tasks giv-en above this research project brings about new knowledge on the dyna-mism and heterogeneity of converging networks and especially why, how and to what direction the development of business models and ways of creat-ing value takes place in the selected setting. By using the results of this re-search project companies will be more able and ready for the creation of new kinds of business models and value propositions inside the converging networks regime. We use the resource based view, network action perspec-tive, ecosystem approach and industry analysis perspective, outlined later in this paper, to understand how and why converging networks change the busi-ness landscape and how companies might deal with these changes. We approach these research objectives by using research methods that are prac-tical and solution-oriented, contextu-ally embedded, respect the process re-search techniques, and are empirically fact-driven.

The research methods used in the research project include both qualita-tive and quantitative data either to be collected during the project or to be derived from earlier studies conducted within Tekes/GIGA research streams. The practical work packages, data col-lection and analysis methods are de-scribed in detail in the project plan of this research.

14

The data collected during 2008-2009 comes mainly from in-depth in-terviews (using a semi-structured inter-view questionnaire) with industry key informants representing different types of businesses, business models, value networks, positions in value networks, and business strategies. The sampling of companies was based on the ecosys-tem thinking; the companies identified for analysis represented technology, product, system, or service providers operating on both infrastructure and application sides of the ICT ecosystem. In totality 21 interviews were made in different companies. In addition, two panel group discussion sessions were organized (one in Helsinki, one in Oulu) to acquire more in-depth information on the emerging topics and point of views identified during the research process.

Process research on organiza-tions has grown significantly (Dooley and Van de Ven, 1999). The grounding idea of process research is that world consists of entities acting in events, which can change along time (Van de Ven and Poole, 2005). Therefore, research based on process epistemol-ogy searches for necessary causality instead of rational causality, generaliza-tion based on versatility and flexibility of explanations, temporal order of ex-planations, layers of causalities and dis-continuations of explanations (Langley, 1999; Van de Ven and Poole, 2002; Van de Ven and Poole, 2005). The seminal article by Pettigrew (1997) requested more organization research based on processual method. He advocated for the idea that if we want to understand organizations more deeply we should acknowledge human behavior to be

embedded in time, agency, structures, contexts, emergence and develop-ment (see also Dawson, 1997; Orton, 1997; Dubois and Gadde, 2002). This means that organizations as human, social processes involve change, shape in time and consist timeless internal identity (Van de Ven and Poole, 2005). Therefore, organizations and their busi-ness modesl are not seen in the present study as research objects that can be explained by using variance-based methods but as social constructions in continuous flux requiring longitudi-nal, qualitative process research (Fox-Wolfgramm, 1997; Sarasvathy and Dew, 2005). Further, we lean on Sarasvathy’s (2001) notion that organizations are merely means driven than goal driven and that our objective as researchers is to understand this meaning-building rather than goal achievement.

Van de Ven and Poole (2005) have proposed there to exist four approach-es to conduct processual organization research: (1) variance-based research where static independent variables ex-plain change as a dependent variable, (2) variance-based research where time-dependent dynamic and com-plex systems of organizational proc-esses are modeled, (3) process research where path-dependent phases of an organization along its development are described and (4) process research where the social construction of emer-gence and continuous re-emergence of an organization is narrated. As we define organizations ontologically made of human, social processes in-stead of natural things and epistemo-logically as events embedded in time and context instead of variables there is no alternative to a case study approach

when analyzing dynamic changes of a complex phenomenon (Dooley and Van de Ven, 1999; Langley, 1999).

According to Langley (1999) good process research can take variety of routes and she presents seven generic strategies for process research. The dif-ferent strategies for process research are; narrative, grounded theory, tem-poral bracketing, visual mapping, syn-thetic strategy, quantification and com-puter simulation. According to Langley different strategies make different kind of senses, therefore the objective of the study is the key factor affecting on which strategy is best for implement-ing the research though every strategy has its weaknesses. In process research there is close linkage between theory and data therefore both inductive and deductive approaches should be mo-bilized simultaneously when research-ing phenomenon processually (Lang-ley, 1999).

Case research is a particularly strong research strategy for studying change in network level processes (Borch and Arthur, 1995; Easton, 2000; Dubois and Gadde, 2002; Halinen and Törnroos, 2005). We argue for the prin-ciples of realist case research (Tsoukas, 1989; Easton, 2000) to explain the se-quence of events over the develop-ment process of business models. At the level of research design realist case study means emphasis on understand-ing a process and search for the con-tingent, necessary causal mechanisms that underlie the process (Tsoukas, 1989; Easton, 2000). Through systemati-cally gathering and analyzing empirical data from multiple sources and multi-ple levels and searching for the intri-cate details of the case under study it is

15

possible to create a novel understand-ing of the specific phenomenon. We advocate for the use of Langley’s (1999) recommendations to sense-make the complicated situation by using the narrating, the visual mapping and the temporal decomposition strategies.

We claim for the narrating strategy to construct a detailed story from the raw data and to prepare a chronology of events for further analysis. The visual mapping strategy is used to build on the narrative with a view to making the changes in the behavior of the firms in the selected setting. A relevant event in the process is defined as the one relating to change in the focal net of a firm. These two strategies are used as supporting steps to a temporal

decomposition strategy. We define pe-riods of development as having certain continuity within each period and cer-tain discontinuity at their frontiers. This decomposition of the data allows us to examine how actions in one period lead to changes in the context, which in turn affects actions in subsequent periods. The idea is to attain a novel understanding of the studied phenom-enon through systematically gather-ing and analyzing empirical data from multiple sources and searching for the intricate details of the case.

In order to ensure reliability, va-lidity and the overall quality of the re-search work, a triangulation approach is used. Due to the high degree of firm-specific contextual dependence of the

strategies and business models within the research setting, the results of this research are not expected to be direct-ly generalized in the positivist sense. In fact, generalization was not among the purposes of this study. However, it is argued that the theoretical frame-works constructed and chosen for this research is transferable to the study of other firms in other contexts and with other research methods. Our approach is based on triangulation of the data source (respondents, times, places), the research method (interviews, sur-veys, panel discussions.), the data type (qualitative and quantitative), different theories or theoretical perspectives, and researchers.

16

Industry analysis increases intra-industry competition. The possibility to deliver voice, video and data regardless the access point brings new service, application, and content providers to the markets. Con-vergence related rapid technological development, uncertainty regarding the dynamic business environment, and multipoint competition are lead-ing internationalizing high technology firms to a situation, where they are una-ble to sustain their competitive advan-tage. Ahokangas and Juho (2008) sug-gest in their study, that this is especially the case with fast-internationalizing firms. Also, already before 2008 there has been some indications that com-panies – within the ICT industry – that have been able to take the lead in de-fining the software architecture and at the same time have been able to posi-tion themselves strategically within this architectural framework and industry, have also been the best performers (Messerschmitt and Szyperski, 2003).

Convergence has also concurrent effects on the industry level. OECD’s (2008) scenario strongly anticipates that the convergence is leading to in-creasing horizontal integration. Keep-ing in mind the strong presence of big international operators, regardless the ambitious attempts of smaller compa-nies to penetrate these markets, the services might be bundled by a few players having the needed resources,

the economics of scale and market power. Outcome might be a reduction in competition within the communica-tions industry.

In line with this discussion, the inter-viewed industry informants ponted our several viewpoints on convergence. Picked from the interviews.

”Niin no, mun käsitys on se, että näi-den yritysten kannalta, joille verkot on jollain tavalla merkittävässä osassa liike-toimintaa, niin konvergoitumisella on tie-tysti paljon seurauksia. Ja toisaalta, niille, että, se varmaan avaa samanaikasesti mahdollisuuksia monille uusille palveluil-le ja sitä kautta uusille ansaintamalleille, mutta koska muilla toimijoilla on tämä sama mahdollisuus, niin kokonaisuu-tenahan kilpailu siis lisääntyy.”

”Eli, käytännön esimerkkinä: jos aatellaan jotain sellaista matkapuhelin-tyyppistä päätelaitetta, joka on näihin päiviin asti useimmiten ollut sidottu jo-honkin yksittäiseen, ja nimenomaan yh-den operaattorin, verkkoon ja sitä kautta tavoitettavissa oleviin palveluihin, niin jos nyt aatellaan, että se sitte monessa tapauksessa jo tänäkin päivänä, mutta vielä enemmän tulevaisuudessa, niin, voi samanaikasesti hyödyntää sitten avoimia wlan-verkkoja, jotka on täysin operaattori-en ulkopuolella, tai jotain muit verkkotek-nologioita, niin toki sillon niiden verkkoja ylläpitävien ja operoivien, ja niissä palve-luita tarjoavien tahojen kannaltahan on

Part  2Initial analysis

ICT technology convergence

The current global communication network convergence is shaping the boundaries, competitive positions, and service characteristics of the informa-tion and communication technology -industry. The emergence of next gen-eration packet-based networks using the internet protocol (IP), digitaliza-tion of the content and the availabil-ity of multi-media devices are driving vertical, independent communication networks towards horizontal network architecture (OECD 2008). In these converged networks the continuously expanding communication services can be accessed and used across dif-ferent networks, regardless which radio access technology will be used. (von Hertzen et.al. 2007). Digital broadcast-ing is a good example of converged content – videos can be distributed and accessed through television, internet, wireless networks or mobile networks, in most cases globally. Nowadays even the contents are provided by dispersed sources with various technologies.

Convergence shapes indus-try boundaries, ICT related services, devices, legislation, and regulation. Convergence has undoubtedly an industry-wide impact on the competi-tive setting. Growing and emerging markets appeal new entrants and, thus,

17

nimenomaan kilpailu lisääntynyt, mutta samanaikaisesti tullut nimenomaan uu-sia mahdollisuuksia sitten palveluille, ja niiden ansaintamalleille.”

”Oli ne nyt mitä tahansa työryhmä-kalenteria tai tavoitettavuuspalvelua tai muuta tällaista, niin kaikille näille, tämän tyyppisille palveluillehan konvergenssi mahdollistaa yhä enemmän toimijoita ja yhä enemmän toteutustapoja; jolloin sitten taas niitä hyödyntävien yritysten kannalta, niin, valikoima kasvaa ja hinta ehkä laskee, mutta samanaikaisesti saa-tetaan sitten vaatia enemmän osaamis-ta näiden kaikkien käyttöön ja toisaalta valintaan.”

”Osittainhan konvergenssi joillekin yrityksille tarkoittaa jakelukanavien, jake-luteiden, näiden monipuolistumista. Niitä tulee lisää siis omille vähemmän fyysisille tuotteille. Sitten samalla tavallaan medi-oiden määrä kasvaa siis monissa muissa funktioissa kuin jakelukanavassa, elikkä vaikkapa asiakaspalvelun kannalta tai after-salesin kannalta tai markkinoinnin, medioiden kannalta.”

”… tää on ehkä yks olennainen pointti konvergenssin kannalta, et kun nyt aatellaan, että konvergenssi tarkoitti just pitkälti sitä, että käyttäjällä on uuden-karhee päätelaite, ja se juttelee erilaisten verkkojen ja palveluiden kanssa sujuvam-min ku aikasemmin, niin ihan varmaan on suhteess isot haasteet nimenomaan näill palvelumuotosilla jutuilla tulla sieltä läpi, vaikka niille, niinku, teknologisessa mielessä hyvät mahdollisuudet oliskin. Eli nää kamerakännykät, paikannus, ja ehkä tulevaisuudessa NFC:kin, niin tota, ne-hän kaikki jollain tavall on nimenomaan menestynyt siinä mielessä, että käyttäjä käyttää niitä yksittäisinä tuotteita tai toiminnallisuuksina, mutta ei välttämät-tä ollenkaan samalla tavalla hyödynnä, niin, niihin liittyviä palveluita, jotka olis

nimenomaan ehkä vielä sen konvergens-sin isompi hyöty.”

”… tää voi toimia toisin päinkin, että läppärillä voi tehdä asioita – vaikka nyt VoIP-puhelu esimerkkinä – jotka ai-kaisemmin ois meinannut sen kännykän käyttöö, et siinä mielessä mobiilipää-telaitteet, kännykällä ja näillä, on ehkä enemmän voitettavaa kuin hävittävää, koska kännykällä ei nyt oo alkuperäsesti tehty juuri muuta ku puhuttu, ja ehkä sen jälkeen lähetelty viestejä. Niin, on niin paljon voitettavaa tietokoneelta ja muil-ta laitteilta, nimenomaan kännyköillä, et sit taas tietokoneilla on ehkä sit taas suhteessa enemmän hävittävää, koska tietokoneilla on jo nyt kuitenkin tehty niin paljon asioita ajankäytöllisestikin.”

”Se oikeestaan mikä nyt näitten kuituverkkojen myötä tulee mahdolliseks niin tällanen et saadaan sieltä samasta töpselistä oikeesti kaikki. Et kodit teknistyy ja kaikki telkkarit, tietokoneet, puheet niin ne saadaan sielt kuidun kautta, et ei tarvi mitään kuparia enää vedellä sinne.”

”No, tavallaan se kaikki kulkee siellä IP*-putkessa, ehkä ne suurimmat haas-teet on tavallaan sen asiakkuuden kon-vergenssissa, joka tavallaan kulminoituu siihen, että kun sulla on useita access-metodeita, niin kuluttajalle ei tulis erillistä laskua jokaisesta kanavasta, kiinteistä puheluista, mobiilipuheluista, kodin laa-jakaistasta, IPTV:stä, mobiili-TV:stä, jos-tain lisäarvotoiminnallisuudesta, auton navigaattorista, jostain palvelusta sun niinku koti-networkissa, elikkä se konver-genssi tavallaan siellä sisällön puolella, tai sanotaan siellä tiedon välityksen puo-lella, niin... se vaatii sitä, että tapahtuu myös konvergenssiä taas tässä asiakkuu-den hoidossa. … että kaikista palveluista sulle tulee vain yks lasku.”

”Käyttäjä ja käyttökokemus. Ihan silleen toisaalta on samantekevää, mitä

kautta se televisio-ohjelmansa saa, ei sitä kiinnosta sitä oikeesti, kunhan ne tulee sieltä. Ja kunhan ne tulee yhtä helposti kun ne tulee tänä päivänä. Et mikäli sen pitää jotain näppylöidä, tietokoneita ennen televisio-ohjelmansa näkemistä, niin se voi unohtaa. Ei kukaan semmos-ta rupee tekemään. Siinä pitää olla yks nappula suurin piirtein, mitä käyttää kun menee kotiin. Sekin on liikaa, että huokastaan niin sieltä pitäis tulla kuva päälle, [epäselvää] ohjelma. Mutta sit-ten jos, tota, se käyttöliittymä tavallaan, millä se saa palvelun sitten käyttöön, on semmonen, mitä ihmiset entisaikona on tottunut siihen, että se on helppoa, sieltä vähän näkyy jotain lumisadetta, niin ei silläkään ollut merkitystä, koska siellä jo-tain näkyi kuitenkin. Jos siinä pitää tehdä hirveen monia temppuja ja aina viritellä uusiksi tai tilailla jotain jostakin, niin se voi unohtaa.”

”Eikö se oo jo vanha juttu se konver-genssi*, nyt puhutaan, että NGN, next ge-neration networks.”

The viewpoints presented by the in-terviewed indicate that they see the consequences of convergence at dif-ferent levels of strategy, and that the consequences also appear to be partly contradictory in nature.

Analyzing industries

Traditionally industry analysis focuses on explaining the market structures and competitive conditions within the selected industry. Understanding the prevailing competitive conditions and market dynamics makes possible to draw some predictions of the attrac-tiveness and future evolution of the industry. Industry analysis is the basis for strategic planning, i.e., companies can continuously analyze competitors’

18

strategies and actions in the attempt to align their own strategies to the continuously changing market situa-tion. Recently, in the spectrum of the business and corporate strategies, the magnitude of vertical and horizontal integration has been increasing.

Industry analysis is usually divided into analysis of the macro-level fac-tors, industry environment and intra-industry analysis. Understanding of the business environment is the prerequi-site for successful corporate (in which industries to be engaged in, vertical integrations and disintegrations) and business (how to survive from the com-petition) strategies.

Macro-level factors. Gartner’s Key Predictions include the following top 10 trends that are highlighted and considered to be the technology ar-eas that executives and IT profession-als should strongly focus on. The full impact of these trends may not ap-pear immediately, but, according to Gartner, companies need to act now so that they can exploit the trends for their competitive advantage. (Gartner Newsroom. http://www.gartner.com/it/page.jsp?id=593207).1. By 2011, Apple will double its U.S.

and Western Europe unit market share in Computers. Apple’s gains in computer market share reflect as much on the failures of the rest of the industry as on Apple’s success. Apple is challenging its competitors with software integration that pro-vides ease of use and flexibility; con-tinuous and more frequent innova-tion in hardware and software; and an ecosystem that focuses on inter-operability across multiple devices (such as iPod and iMac cross-selling).

2. By 2012, 50 per cent of traveling workers will leave their notebooks at home in favour of other devic-es. Even though notebooks con-tinue to shrink in size and weight, traveling workers lament the weight and inconvenience of car-rying them on their trips. Vendors are developing solutions to address these concerns: new classes of In-ternet-centric pocketable devic-es at the sub-$400 level; and serv-er and Web-based applications that can be accessed from anywhere. There is also a new class of applica-tions: portable personality that en-capsulates a user’s preferred work environment, enabling the user to recreate that environment across multiple locations or systems.

3. By 2012, 80 per cent of all commer-cial software will include elements of open-source technology. Many open-source technologies are ma-ture, stable and well supported. They provide significant opportu-nities for vendors and users to low-er their total cost of ownership and increase returns on investment. Ig-noring this will put companies at a serious competitive disadvantage. Embedded open source strategies will become the minimal level of in-vestment that most large software vendors will find necessary to main-tain competitive advantages during the next five years.

4. By 2012, at least one-third of busi-ness application software spend-ing will be as service subscription instead of as product license. With software as service (SaaS), the user organisation pays for software serv-ices in proportion to use. This is fun-damentally different from the fixed-

price perpetual license of the tradi-tional on-premises technology. En-dorsed and promoted by all leading business applications vendors (Ora-cle, SAP, Microsoft) and many Web technology leaders (Google, Am-azon), the SaaS model of deploy-ment and distribution of software services will enjoy steady growth in mainstream use during the next five years.

5. By 2011, early technology adop-ters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service. Increased high-speed bandwidth makes it practical to locate infra-structure at other sites and still re-ceive the same response times. En-terprises believe that as service ori-ented architecture (SOA) becomes common “cloud computing” will take off, thus untying applications from specific infrastructure. This trend to accepting commodity in-frastructure could end the tradition-al “lock-in” with a single supplier and lower the costs of switching suppli-ers. It means that IT buyers should strengthen their purchasing and sourcing departments to evaluate offerings. They will have to develop and use new criteria for evaluation and selection and phase out tradi-tional criteria.

6. By 2009, more than one third of IT organizations will have one or more environmental criteria in their top six buying criteria for IT-relat-ed goods. Initially, the motivation will come from the wish to con-tain costs. Enterprise data centres are struggling to keep pace with the increasing power requirements of their infrastructures. And there is

19

substantial potential to improve the environmental footprint, through-out the life cycle, of all IT products and services without any significant trade-offs in price or performance. In future, IT organisations will shift their focus from the power efficien-cy of products to asking service pro-viders about their measures to im-prove energy efficiency.

7. By 2010, 75 per cent of organisa-tions will use full life cycle energy and CO2 footprint as mandatory PC hardware buying criteria. Most tech-nology providers have little or no knowledge of the full life cycle ener-gy and CO2 footprint of their prod-ucts. Some technology providers have started the process of life cycle assessments, or at least were asking key suppliers about carbon and en-ergy use in 2007 and will continue in 2008. Most others using such in-formation to differentiate their prod-ucts will start in 2009 and by 2010 enterprises will be able to start using the information as a basis for pur-chasing decisions. Most others will stat some level of more detailed life cycle assessment in 2008.

8. By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred suppli-er status. Those organizations with strong brands are helping to forge the first wave of green sourcing policies and initiatives. These pol-icies go well beyond minimizing direct carbon emissions or requir-ing suppliers to comply with local environmental regulations. For ex-ample, Timberland has launched a “Green Index” environmental rating for its shoes and boots. Home De-

pot is working on evaluation and audit criteria for assessing supplier submissions for its new EcoOptions product line.

9. By 2010, end-user preferences will decide as much as half of all soft-ware, hardware and services acqui-sitions made by IT. The rise of the Internet and the ubiquity of the browser interface have made com-puting approachable and individu-als are now making decisions about technology for personal and busi-ness use. Because of this, IT organi-zations are addressing user concerns through planning for a global class of computing that incorporates user decisions in risk analysis and innova-tion of business strategy.

10. Through 2011, the number of 3-D printers in homes and businesses will grow 100-fold over 2006 levels. The technology lets users send a file of a 3-D design to a printer-like de-vice that will carve the design out of a block of resin. A manufacturer can make scale models of new prod-uct designs without the expense of model makers. Or consumers can have models of the avatars they use online. Ultimately, manufacturers can consider making some compo-nents on demand without having an inventory of replacement parts. Printers priced less than $10,000 have been announced for 2008, opening up the personal and hob-byist markets.

A Tekes study made in 2009 discusses the global megatrends. According to the study, the following six trends were highlighted (Ahola & Palkamo, 2009):1. Consumption-related expenses will

decrease as the consumers become

more aware of the global produc-tion costs.

2. Scarcity will shift the consumption. 3. Leisure time consumption will lead

the consumption’s way.4. New customer movements shall

shape global innovations.5. Competences can be found in the

core of economy.6. Technological discontinuity will

bring about new technology para-digms.

Also Churchill lists top ten trends.1. Demographics are destiny, creating

opportunity. Baby boomers are an opportunity, including an “eBay for information” that exceeds the mar-ket for physical goods. This is a U.S./Canada/U.K. trend. Baby boomers as the first Internet savvy seniors. Smart, active, group, entering AARP age. 75 million of them, half the U.S. workforce. In 2025, the entire coun-try will look like Florida does to-day. Nothing will change that. De-mographics are destiny. Over have of businesses and franchises are started by people in this group. At home, educated and Internet savvy. Services online will exceed market for goods online. Another market: the mental exercise market. If you are 35 or older, cognitive decline is at the same pace as 80 year olds.

2. The mobile phone will be a main-stream personal computer. With built in projector. Authentication. Credit cards on SIM cards. ID cards, passports, drivers licenses. Any in-formation you need.

3. The rise of the “implicit” Internet. To-day your permanent record exists; you create a trail of data exhaust, digital bread crumbs. Implicit da-

20

ta that exists in silence. Movie rent-als, restaurant reservations, books purchased, Web sites visited, etc. All of this data existed in silence. No easy way until now to benefit from the data; but the silos are coming down. Google, Yahoo, Facebook, Mozilla collecting data. Trend is that big wave will come to companies that are able to novel and new ways to deliver information by crossing these silos, with implicit data on the Internet. Use social networking da-ta to improve search. Conversion of data exhaust will create value in new and interesting ways. All of the panelists seem to agree that this is a key trend.

4. Betting on smart phones: The mobile device migration to smart phones from features phones will produce even greater disruption than PC in-dustry moving from character mode to graphical interface. Used to be just Palm and Research in Motion. What you are really doing, is put in real software environments, with ap-plications layer that separates net-work from physical device. Phones far more pervasive than PCs. Will take out Motorola. One of LG, Samsung or Sony Ericsson as well. Will be intense-ly disruptive. And it will hurt Micro-soft. You cannot make a great con-sumer product with unbundled op-erating system. It will be incredibly disrupted. In five years, half of what we think of as phones will do some-thing far more profound than what we think of a phone as doing. De-sign centers will fragment. An Ama-zon Kindle is a smartphone, with 3G network behind it. A life changer for people who use it. Will turn billion unit a year industry on its head. As-

sume Nokia, Apple, RIMM will do re-ally well.

5. Water tech will replace global warming as a global priority. The world is running out of usable water and will kill millions more in our life-time than global warming. One bil-lion of 6 billion people do not have healthy water. We’re losing close to 1 million people a year under 5 years old due to dirty water.

6. Evolution trumps design. Many in-teresting unsolved problems in computer science, nanotech, and synthetic biology require construc-tion of complex systems. Evolution-ary algorithms are a powerful alter-native to traditional design, blos-soming first in neural networks and now in microbial engineering. Near-term trend: year or two, components of microbial engineering products will involve some form of evolu-tion. Design for evolution. Has been used in neural networks. In microbial work, cripple a microbe, so it can do the one thing it does better and bet-ter. To make industrial chemicals. Ap-plied to analog circuit design. In the future, artificial intelligence.

7. Fossilizing fossil energy. Oil and coal will have trouble competing with biofuels. 99% of discussion on the topic is completely irrelevant to the topic. In 4–5 years will have pro-duction proof that can sell biofu-el at well below $2 a gallon at to-day’s tax structure and no subsidy. Can’t imagine how big oil can stay in business if that is an alternative. Zero land needed to replace 100% of our gasoline. The other major is-sue is electrical power generation, which is coal and natural gas. One of his companies signed deal for

175 MW solar plant at costs below natural gas. Cheaper and less sub-ject to commodity pricing.

8. Venture Capital 2.0. Venture cap-ital has underwritten most of the transformative software and Inter-net companies over last 20 years. Changing economics will have dra-matic impact on the venture capital industry, in particular for software and IT.

9. Within 5 years, everything that mat-ters to you will be available to you on a device that fits on your belt or in your purse. Massive shift in Inter-net traffic from PCs to smaller devic-es. You should all get a Kindle, and study this thing, Roger says. Apple has it in the long run, wrong. Won’t be about watching created con-tent, it will be about creating con-tent. Within 10 years, more Internet traffic from your person than all oth-er locations put together.

10. 80% of the world population will carry mobile Internet devices with-in 5-10 years. Dial-tone is going to be gone. By next year, people will put micro cells in your house. Chi-na Mobile has 500 million billable lines. Within 5-10 years will hit 5 bil-lion global wireless phones.

The trends listed in recent publications point our things that are commonly “known” by the ICT industry analysts and big players within the industry. Also, to some degree the above state-ments have been given to speed up the transformation of the industry to desired directions. The trends picked up from the interviews indicate that the informants are rather well aware of these “known facts” but they are also concerned with partly different

21

phenomena. But, trends are difficult to anticipate. Those that have been expected to become realized by the interviewed have taken much longer time than expected, if realized at all.

”Varmaan jotain tommosii trendei voi olla olemassa ilman, että [epäselvää] mitään niistä tietäisi, et mut ylipää... no, monet – jos nyt mobiilijuttui ylipäätänsä aattelee – niin, niissähän on ollu koko tän vuosituhannen – ainakin mää pitäny sitä rasittavana piirteenä – et monet jutut, jotka on tullu sittemmin koviksi jutuiks, ne ei oo välttämättä ollu, niinku, kovinkaan hyvin etukäteen tiedossa. … aika harvat hahmotti sen, että kännykkään tulee ka-mera, ja että se on yks sen tärkeimmstä ominaisuuksista. Ja paikannus GPS-muotosena, joka nyt oli sit seuraavana. Niin tota, nää molemmat on semmosia, joita ei kovin paljon etukäteen... aika har-va hahmotti.”

”Niin, ja vastaavasti samanlaiset, tyyliin sosisaaliset tekijät vois osass tilan-teissa toimii niinku inhibaattoreinakin.”

”Mut että eihän kukaan tässä maa-ilmassa tiedä et mitä on interaktiiviset palvelut viiden vuoden päästä. Kuka niin-kun näki jonkun Facebookin? Okei, niillä oli tiettyjä tällasii signaaleja megatren-deistä, sosiaalinen plaap.plaap.plaa, mut loppujen lopuks ne on aika pienet asiat, mitkä siihen vaikuttaa, mitkä saa sitten homman lentämään.”

”Siinä on käynyt joku hyvä säkä, että itse asiassa, kuinka helposti liiketoiminta lähtee liikkeelle … Nokia aloitti. Se möi sen ideologian aikanaan soittoäänillä. Kuluttajat rupes valikoimaan puheli-men sen mukaan, miten puhelimessa on soittoääniä. Ja se markkina oli täysin valmis sitä varten. ... Ei [epäselvää] ja ku-vitelmat sen liiketoiminnan kasvamiseksi meni aika huikeaksi sitten. Että kyllähän ensimmäisen vuoden kasvukäyrät, niin

nehän oli – tai -99 kun ensimmäiset oi-keesti avattiin, vuonna 2000, niin sehän yli 100-kertaistui se liikevaihto. Siihen ruvettiin sitten kautta maailman läh-teen rakentaan eri näkösii oodtusarvoja, että miten tän liiketoiminnan odotettin* kasvavan. Ja sitähän se ei oo ollut, et lii-ketoiminta sinänsä ja se markkina-arvo on tällä hetkellä kuitenkin huikea tässä lisäarvoliiketoiminnassa, mutta ne odo-tusarvot, jotka sille asetettiin, niin ne ei kohdannut toisiansa.”

”… kaikki muut markkinointikana-vat, niinku mediat, normaalit, niinkun sähköiset mediakanavat laskee, paitsi netti ja mobiili.”

Cloud computing as a topic leads to controversial opinions.

”Ja jotenkin sen puolelta jos aatel-laan, niin nyt varmaan seuraava 10-15 vuoden iso trendi on nää pilvipalvelut. Se on sellanen, se on mahdollistava tekno-logia, joka mahdollistaa globaalien pal-velujen tekemisen silleen et se alkuinves-tointi ei oo niin järkyttävä ja et palvelut viel jollaki tavalla liittyy toisiinsa.”

… mutta kyllä jos esimerkiksi katsoo Microsoftia ja niitten asemaa, niin ne on aika sivuraiteilla koko tästä kehityksestä, koska ne on siinä vanhassa maailmassa, missä sulla on käyttis ja applikaatioita ja kaikkii näitä ja se on, ne ei oo niinku re-levantteja … Et ei siinä ketään vois kiin-nostaa mitkään Windows-käyttikset tai destktopilla tai [epäselvää] jossain Vista, XP, kaikissa näissä, ei vois vähempää kiin-nostaa, koska se ei oo sen käyttäjän kan-nalta niin, se ei vaan kiinnosta.”

The future’s device is already here.

”Sä et HD-kuvasta esimerkiks pienessä näytössä saa semmosta hyötyä, kun sä saat isossa näytössä. Et jos sä aattelet, oletetaan niinkun

normaaliresoluutioinen – mä näkisin tään, et tommonen 3,5-tuumanen näyt-tö tulee aika pitkään oleen standardi tässä useamman vuoden ajan, koska se on semmonen kämmenenkokonen unelma. … mut sitte bulkkiluuri tulee olemaan 3,5-tuumanen, ja tarkkuus ehkä tost vielä nousee, mut se oo oleel-lista, koska kun ihminen kattoo sitä näyttöö näin, niin jossain vaiheessa me-nee se et sillä ei oo silmälle enää mitään väliä, varsinkaan liikkuvassa kuvassa. Et sinänsä, mä sanosin näin, et meill on nyt se standardi mikä, ne kaikki standardit kasassa mitkä mahdollisti internetin rä-jähdyksen -90-luvun lopulla. … tää vuo-si 2009 ku Nokiallakin on kosketusnäy-töllinen, niinku periaatteessa koko mo-biiliteollisuus on siirtynyt tämmöseen, tähän aikaan, ja sit hinnat tulee laske-maan koko ajan, ja mennään siihen 200 hintaluokkaaan, todennäköisesti jo 2009, niinku ens jouluna, kun nyt on 300 hintaluokassa, et tiputaan siihen 200, sit kun päästään alle 150, sit on niinku se viimeinen take-off*.”

It is the user experience that matters.

”No ei käyttistasolla, ei loppukäyt-täjää kiiinnosta se käyttis, siis se mitä sil-lä voi tehä tai miten sitä voi käyttää, … meillähän on koko niinku yhtenä strate-giana – siis päästrategiana – on se et se on sama kokemus PC, mobiili, ja web…”.

Downloadable application business is possible declining.

”… vähän poikkeus tuosta massasta … Applen UpStore on mennyt ja miten paljon siinä tulee applikaatioita ja down-loadeja ja näin, mut muutenhan se trendi on pois tällaisesta tavallaan ladattavista applikaatioista, et hyvin harva asentaa mitään applikaatioita muuta ku pelejä, jos on perus-PC tai -Mac, niin aika vähän

22

sellaisia dedikoituja clientteja, ja sama juttu kännyköissä, et se on selkee trendi tuossa.”

Labor towards cheaper countries.

”Tällä hetkellähän meillä on yli 6000 ihmistä pelkän Telecomin puolella, ja kyl se tehdään sisäisillä resursseilla, mut ne sisäiset resurssit on enemmän ja enem-män tuolla low costissa, Intiassa, Kiinas-sa, kenties Pohjois-Afrikassa tulevaisuu-dessa.

Revenue logic first, technology follows.”

”… ennen se teknologiapuoli sai ihan itse tehdä päätöksen, että mitä ne hankki, nykyään mitään isompaa pää-töstä ei tehdä ilman sitä bisnescasen las-kemista, mikä on ihan oikein. … globaa-lilla tavallakin myynti menee sillai, että se on kaks tahoo, jolla myydään, joiden pi-tää kummankin ostaa, on se bisnespäät-täjä ja on se teknologiapäättäjä.”

”Niin luonnollisestihan kulutustottu-mus, tai kuluttajathan määrää markkinat ja markkinat määrää tuotekehityksen. Täs tapauksessahan tietysti kun puhutaan digitaalisesta maailmasta, niin ihmiset on niin valtavan kiinnostuneita uusista gadgeteistä ja mahdollisista sovellutuksis-ta ja palveluista, niin, tavallaan teknologia myös määrää valtavasti sitä markkinan muodostumista, mutta onko se sitten se teknologinen sovellutus, joka menestyy, niin se on taas sitten kuluttajan käsissä.”

Digital music is a growing industry but also facing some challenges.

”No digitaalinen musiikkihan … sisältää niin PC-, Mac-, kuin sitten mobii-likanavat kaikki. … niin kaksnumeroisia kasvulukuja edelleen Suomen osalla ... 15 % kasvua edelliseen vuoteen, joka taas sitten taas tämmösenä markkina-aika-na niinku on erittäin mieluisaa. Täytyy

tietysti muistaa, että siinä puhutaan niin-ku aikoinaan on lähdetty nollatilantees-ta. … Valtava haaste on piratismi, joka siellä syö samaa kakkua, ja... että edelleen valtavaa kasvuu.”

”Se, mikä tulee varmasti oleen nyt seuraava steppi, niin a la carte -kaupat eivät enää ehkä tuu siinä määrin siinä määrin kasvamaan, eli tarkoitetaan sitä, että ostetaan yks yksittäinen biisi tai al-bumi, vaan niinku enemmän mennään siihen niinku kokonaispalvelun puolelle. Että selvästi nyt on tulossa, 2009–2010 siellä on tulossa muutama isokin kaup-papaikka, jotka sit tarjoaa kaiken kuu-kausifeetä vastaan … kun lopettaa sen kuukausmaksun maksamisen, niin sil-loinhan se myös tavallaan menettää ne kaikki, mitä on kuunnellut, soittolistansa ja muut, et siinä on omat puolensa ostaa a la carte -kaupasta. Fyysinenhän, täytyy edelleen muistaa, on tän bisneksen ki-vijalka ja tekee sen rahan, että puhtaan digitaalisen kaupan osuudessa, niinku, rahapuolella niin, noin jostain 6 % reve-nueesta, jonka se jättää tohon.”

”Kyllä, kyllä, kasvaa, koska valitet-tavastihan fyysinen tietysti laskee ja digitaalinen kasvaa niinku noiden pro-senttien varjossa, mitä sanoin äsken. To-siaan niin, se aiheuttaa tietysti sitä, että merkitys sitten taas... markkinaosuus di-gitaalisella musiikilla kasvaa. Mutta siis se mikä siinä on suuri haaste jokaisella sisällöntuottajalla, niinku levy-yhtiöllä, on se, että toi keskiostoksen hintahan on romahtanut cd-ajoista, että silloin kun aikoinaan nuoriso osti kokoelma 20 euroo, niin nyt se on niinku haetaan biisi kerrallaan. … Joka on sitten taas on euro-kaks. Et onkohan keskihinta tällä hetkellä jossain kahdessa-kolmessa eu-rossa per kuluttaja, että musiikkiahan käytetään siis tällä hetkellä enemmän kuin koskaan. … Mutta sitten se taas

niinku loppuvalmistajan, tuottajan, ar-tistin, niin että se päätyy sinne se tulo, niin se on se haaste tällä hetkellä ehkä eniten markkinalla.”

”Tietysti kellään ei tietysti oo sitä kristallipalloo, mutta näyttää siltä, että noin kolmen vuoden sisään digitaalinen myynti tulee oleen merkittävää. Meneeks se sitten Suomen kohdalla ohi fyysisen, sen näyttää sitten aika, … , ja osittain ollaan jo yks sukupolvi menetetty laitto-mille latauksille, mutta tehdään vahvasti töitä, että saatais nää vertaisverkkoajat-telumalleja ja muuta, niin, niistä luotua järkeviä bisnesmalleja, jota on nyt tapah-tumassa, ja hyviä esimerkkejä on tullut maailmalta, missä on onnistuttu luo-maan konsepteja isojen operaattoiden kanssa. Näistä malleista henkilökohtai-sesti nään, että tää ei oo enää edes tule-vaisuutta, tää on tätä päivää.”

Social media is the driver.

”… esimerkiksi sosiaalisten tekijöi-den, niiden... niihin perustuvien palvelui-den kohdalla, ... palvelu on nimenomaan ollu sellanen, joilla on jo pitempään saattanut olla mobiili-internet olemassa ja mahdollisuus sitä käyttää, niin ne ei oo sitä tehny, mutta tällanen sosiaalisen median palvelu onkin sitten yhtäkkiä muuttanut tilanteen, ja Facebookillakin voi olla yllättävän kovii ne luvut, mitä siel-lä näytetään prosentteina mobiilikäytös-tä, ... lopputulos se, että mobiili-internettii, mobiilipäätelaitetta, ehkä jopa konver-goituneita verkkoja, käytetään enemmän ku aikasemmin, käytetään paljon, sille on selkee käyttötarkotus, mut se syy tähän ei välttämättä oo näissä mahdollistavissa tekijöissä, konvergenssissa sinänsä, tai päätelaitteen ominaisuuksissa sinänsä, vaan se on tullu sieltä sen sosiaalisen as-pektin kautta. Ja se vastaa muuttuneita käyttötottumuksia.”

23

Industry environment and structure

The purpose of the industry analysis is to predict the changes in the industry structure. These changes are related to the current changes in the products, technologies, strategies of the leading players, infrastructure and government policies.

Understanding the sources of sus-tainable competitive advantage has been one of the major research areas in the strategic management literature. Porter’s (1980, 1985) industry analysis framework together with the concept of the competitive advantage and value chain, suggest that firm’s sustain-able competitive advantage is derived from its internal strengths, at the same time taking into an account the exter-nal possibilities and threats. According to Barney (1991), company is having a competitive advantage when it is im-plementing a value creating strategy which is not being implemented simul-taneously by its – current or potential – competitors.

In real life, competition between the companies is a never ending game. One strategic move from one competitor – whether competitive or cooperative in its nature – leads to another by another player, in which the first company will react … Industry structures change and reform over the time. Understanding of the near history and current dynamics, make the estimation of the industry’s fu-ture evolution possible. Combining the industry analysis with the anticipated technological developments, some judgments and assumptions concerning the near future can be drawn.

In recent discussion on both aca-demic and managerial literature the

competitive advantage has been seen to be more likely a temporary rather than a sustainable one. Increasing competition, new entrants into the markets, companies seeking new busi-ness areas, all these are good examples of phenomena which obviously short-en the lifecycle of companies’ com-petitive advantages. It has been noted that resource based theories suggest that company’s resources are the cru-cial factor when building a sustainable competitive advantage. This, however, might not be the case anymore. This new situation means that the business and corporate strategies must be re-thought accordingly.

Companies are supposed to aim at achieving a sustainable competi-tive advantage to create profits that exceed the average profit level of the industry. From the theoretical angle, competitive advantage is a result either from the intra-industry cost or differen-tiation advantage. Cost advantage is reached when company is able to pro-vide its products with a lower cost than its competitors can do, differentiation advantage could result from real physi-cal differences to intangibles, like the brand. Prahalad and Hamel (1990) in-troduced core competencies as capa-bilities that serve as a possible source of competitive advantage for a firm over its rivals. Resource based view empha-sizes the role of the resources and ca-pabilities as distinctive competencies in creating the competitive advantage.

High technology firms typically face dynamic, global markets. Custom-ers are not geographically dependent and business activities can be located in many countries. This sets demands on wide-ranging competitive posi-tion, but on the other hand, brings

possibilities to utilize foreign resources. Ghosal (1987) notices, that global firm can utilize this comparative advantage of nations by configuring its value chain so that firm locates its activities in different countries according to the cost and intensity of that particular re-source. Foreign recourses might lead to the competitive advantage because of the asymmetric resource endowments at a national level. The interviewed pointed out several factors that can be related to the above discussion.

Government support and actions to-wards the existing big players might not yield the best possible outcomes.

”… kaikkihan noi Shokit on määri-telty tiettyjen Suomessa toimivien suu-rempien pelureitten ehdoilla, että tietysti Nokia, jees, tärkeetä ja tuetaan Nokian toimintaa, sit siellä on niinku autoteolli-suuteen ja tämmöseen [epäselvää] jut-tuihin liittyyvää juttua, joka on suoraan [epäselvää] ElektroBitin Shokki, ja sit siellä on niinku periaatteessa ihan, et ne on hyvin pitkälle lähtee siitä olemassa-olevasta toiminnasta, ja siellä on hyvin vähän, jos ollenkaan, sellaista, joka täh-tää mihinkään uuden luomiseen. … tul-laan siihen, että mikä se tavoite, onko se tämän nykyisen toiminnan ylläpitämistä ja säilyttämistä, vai haetaanko oikeesti jotain uutta? Ja jos oikeesti haetaan jo-tain uutta ja sit haetaan uusia juttuja, innovaatiota, niin silloin se pitäis oikeesti, niin, kohdistaa näihin, sanotaan, niihin toimijoihin, joilla voi oikeesti tai joilta voi odottaa jotain uusia innovaatioita, elikkä silloin tullaan just start-uppeihin, ja ta-vallaan tätä yrittäjyyttä – ja itse asiassa yrittäjyys on vähän haasteellinen sana, että periaatteessa tätä start-up-kulmaa pitäis huomioida, ja ihan tällaista entrep-reneurshippiä, … pitäs Suomessa saada

24

aikaseksi, mikä tässä just kaikissa [epä-selvää] teknologiatuotteissa, missä pitäs kääntää paljon voimakkaammin tähän palveluinnovaatioon ja bisnesmalli-inno-vaatioon … sit vielä tää, mitä Suomessa kannattaa tehdä ja mitä ei, niin ei kan-nata lähtee tekeen väkisin innovaatioita sellaisilla alueilla, jotka on jo aika hyvin suurien pelureitten [epäselvää], ei sun kannata lähtee tekeen uutta Ciscoa Cis-con paikalle ...”

Supplier power. Operators have a pos-sibility to guide the development.

”Kyllä ne on täysin kilpailevia ja se konsernin sisäinenkin, et meilläkinhän on esimerkiks 10 000 KTV-, kaapeli-tv asi-akasta. Ei me siihen verkkoon investoida, se saa kuolla pois. Jossain vaiheessa…me myös skräpätään nämä vanhat KTV-liittymät kuituliittymiks ja se vanha KTV-palvelu muuttuu IPTV-palveluks. Ne ei siis välttämättä ees tiedä, et niille on tullu IPTV-palvelu. … yhtäkkiä siellä na-pin takana vaan onkin, mistä voi ruveta kattoon viikon vanhoja ohjelmia ja sen jälkeen ne ei luovu siitä KTV-palvelusta koskaan.”

Buyer power. Buying the services is tricky. Consumers don’t like to pay, don’t like to install DRM applications, and even in the cases they accept the fees, the payment methods are still in the very early phase. The un-usefulness of payment methods may prevent the business to grow.

”No, a la carte -kaupassahan meil-lä on tapahtunut se.... tai aikoinaan kun tuli, niin varmaan siinä oli se, että se käyttökokemus ei ollut mieluisaa, että siihen joutu lataamaan erilaisia playe-reitä, siin pelästyttiin sitä DMR:ää, jolloin se tietysti syntyi se hankaluus. Ihmiset innoissaan meni lataan, osti, tapahtui

niin kuin laskutus, mutta ei ikinä saanut sisältöä. Kaikkii tämmösii, se oli erittäin haastavaa, ja tavallaan siinä maailmas-sa eletään edelleen kun menee tavallisen kuluttajan kanssa puhumaan, ne sanoo, että ei sieltä löydy mitään, ja se on erit-täin hankalaa ja vaikeeta ja vaatii luotto-korttitietoja ja vastaavaa, että... Se, mikä on yks iso haaste tässä itse asiassa, kun sanoin just tuon luottokortin, niin sehän on nuorisolle erittäin haastaavaa, että se on varmaan yks sähköisen etäkau-pan haaste niin fyysisellä puolella kuin digitaalisessa jakelussa, että millä se ra-hastus tapahtuu sitten siinä, että kun ku-luttaja ostaa, niin, et me saadaan myös se teinikin ostamaan sieltä helposti, koska heillähän ei ole oikeastaan niinku luottokorttimahdollisuutta kuin mennä vanhemman luokse ja --- … ehkä vaa-tis sit ehkä semmosta niinku varmaan laiteteknologisestikin kehitystä, että siel-lä ois joku uus PayPal-systeemi tai joku tämmöinen, joka sitten räjähtäis Skypen tapaan, ninku kaikkiin koneiisiin tai vas-taavaa. … kyllähän semmonen core-ryhmä tietää paypalit ja muut, mutta... se on niinku... puhutaan niin pienestä massasta, että me halutaan se koko niin-ku kenttä haltuun ja halutaan siitä sem-monen positiivinen, että tää on yks tapa hoitaa asioita. … Ehkä yks sitten vois olla mobiilissa operaattoreiden kanssa niin kuin mahdollinen, että laskulla maksut, tämmöset. Mutta niissä on sitten hei-dänkin omat komissiot, ne liikkuu aika hurjissa prosenteissa, että se tavallaan tappaa sen bisnesmahdollisuuden.”

”Sit taas kaikki tietää, että mobiili on vielä ihan lapsenkengissä, nettipuo-lella, siellä ollaan jo vähän pidemmällä. Toinen on tietysti se, mikä vaikuttaa lii-ketoimintamalleihin on se, että millä ta-valla, mitä tahansa mediatyyppiä pysty-tään välittään digitaalisesti, eli kuluttaja

pystyy vastaanottamaan käytännössä jo HD-tasoista kuvaa tavallisella tietokoneel-la, jossa sitten taas niinku se näyttölaite pystyy oleemaan sama kuin mikä on tv-käytössä, ne ei oo niinku erillisiä laitteita. Se konvergenssi on siellä näyttöalaitepuo-lella kehittyny. Sit taas mobiilien omass maailmassa sitä 50-tuuman plasmaa on vaikeempi laittaa taskuun, et siel sit tulee sit omat rajotteensa, ja se mitä ihmiset haluaa taskuun, mistä ne on halukkaita maksamaan, niin siellä – ikävä kyllä, vaik-ka ehkä toimijat muuta haluaa – niin esi-merkiks premium-palveluiden aika alkaa olla ohi, ne pitää pystyy paketoida jonkin-laiseen kuukausimalliin, ja toinen on se, et mistä asiakkaat on kerran kuukaudess halukkaita maksamaan, niin se on erittäin hyvä kysymys. Eli sielläkin koetaan, että netti on ns. ilmanen, niin myös mobiilinetti pitäs olla ilmanen. Ok, siirtotie ei sinänsä oo ilmanen, mut sitte taas sielläki kilpailu laskee sitä hintaa mitä ihmiset on haluk-kaita maksamaan ja sen lisäksi sen päälle pitää alkaa paketoida palveluita, ja siinä liiketoimintamalli pitäs olla niin läpinäky-vä, niin selkeä et kuluttaja ymmärtää sen, et se ei missään nimess mieti sitä et “tää on kallista”, sen ei pitäs niinku ajatella sitä me-diaa käyttäessä, että tää on kallista, vaan käyttää sitä. Suurten lukujen matematiik-kaa toimii. Se on se.”

Innovations in the payment methods would be welcome.

”No, mä uskoisin, että nuo kaikki, ta-vallaan myös tuo maksutapa, maksupal-velu, niin, ne kaikki liittyy yhteen. Eli sen täytyis alkaa ihan siitä, että kun ihminen hankkii laitteen – on se sitten mp3-soitin tai puhelin tai mikä tahansa, kannettava, läppäri, mitä tahansa – niin, se olis val-miina siinä. … Tavallaan näkee, niinku, että no jos, että sen jälkeen kun kulutta-ja niin päässyt sisään siihen, valitsee se

25

minkä tahansa tavan, niin, hänelle tuo-tais se hänelle niin helposti siihen, että “hei, hanki tästä”. Jos se on kuukauskäyt-töliittymä, niin, “kiitos, että otit tän, nyt se toimii”, operaattori hoitaa sit tai mitä tahansa. Et tavallaan hänen ei tarvitsisi tehdä muuta kuin yksi rekisteröityminen yhteen paikkaan, joka identifiois sen laitt-teen hänen laitteekseen, jolla hän pystyisi sitten jatkossa toimimaan digitaalisen musiikin hankkijana. H: Aivan. JP: Ja vois käyttää sitten erilaisia sovellutuksia, mä uskoisin, että se ois varmaan, että kun me tuotais siitä sadan klikkauksen takaa toi homma niinku semmoiseen alle kymme-neen, että se ois helppo ja nopee. Muuta-massa minuutissa käyttövalmis.”

”Siinäkin on taas se, että tiettyjä asi-oita sä voit tehdä sillä puhelinlaskulla, tietyt asiat sä lasket, ne on niinku tilaus-pohjaisia palvelupuolella, mut se, että sä pystyt konkreettisesti kännykällä hankki-maan hyödykkeitä, jotka pitää maksaa jotenkin, niin siinä on se mobiilikauppa, niin onhan se yks osa, joka on vielä lap-senkengissä.”

The user experience is not always fully understood by the designers.

”Tavallaan et jos se lähtee sieltä tek-nisestä innovaatiosta, niin se on myös erinomaista, mutta ne ihmiset, jotka niitä toteuttaa, ne on niin uskomattoman sy-vällä siinä asiassa, että heille taas sem-monen niinku tavallinen kuluttaja, joka tuolla vielä taistelee, että missä PC:ssä on power-nappi, niin se tavallaan ei koh-taa sitä. Että se sovellutus on edelleen liian hankalasti piilossa jossain. Niin kun miettii musapuhelimii, vastaavia, niin, se pitäisi olla niinku erittäin semmosen vanhan soittimen näkönen, että “paina tosta ja alat kuunteleet, tosta kirjotat sii-hen “Madonna”, ja sen jälkeen sulla on Madonnat siinä, ja valitset siitä, ostat

itselles tai kuuntelet niitä”, et miten vaan käyttääkin sitä omaa laitettaan.”

User experience is in a key role.

”… vaikka mä oon teknologiajohta-ja, mun on vaikee suhtautua teknologi-aan teknologian vuoksi. Että teknologiaa ei pitäisi kehittää teknologian vuoksi, että, tuota... Kyllä se ehdottomasti tulee olemaan ne palvelut ja sovellukset, mit-kä ajaa sitä, mitkä tavallaan valikoi* sen markkinan. Totta kai siellä on pakko olla jonkin tyyppinen verkko alla, että voi-daan käyttäa sitä.”

Users’ needs are difficult to reveal.

”... Niin, se varmaan lähtee siitä sitten, että kun tyyliin on se Facebook – mehän ei voida tyrkyttää niinku asiakkaille... tai myydä niille mitään, mitä ne ei tarvi, ja toisaalta on se vaikee myydä yhtään mitään, mitä ne ei tiedä tarvitsevansa. Ja jos vaikka ajattelee Facebookia, niin mä en usko, että sä voisit tehdä vaikka minkälaisia asiakaskyselyitä, niin sä et voi... ne ei vastaa sulle, että me halutaan jostain syystä niinku Facebook on, koska se on niinku... sitä ei pysty tiedostaan. ... Facebook opettaa siihen, että on ylipää-tään virtuaalikaverisuhteet, ja voidaan niinku kommunikoida näitä käyttäen. Että voidaan lähettää synttäritoivotuk-sii Facebookissa – tai virtuaalilahjoja tai muuta. Virtuaaliruusuja, mistä on pu-huttu paljon. Virtuaaliruusuthan maksaa enemmän kuin oikee ruusu. Silti sen arvo on ihan samalla tavalla koettu.”

Users have learnt that content is free. To change this – it might be hard but worth trying.

”… ollaan jo yks sukupolvi mene-tetty laittomille latauksille, mutta teh-dään vahvasti töitä, että saatais nää vertaisverkkoajattelumalleja ja muuta,

niin, niistä luotua järkeviä bisnesmalle-ja, jota on nyt tapahtumassa, ja hyviä esimerkkejä on tullut maailmalta, missä on onnistuttu luomaan konsepteja isojen operaattoiden kanssa. Näistä malleista henkilökohtaisesti nään, että tää ei oo enää edes tulevaisuutta, tää on tätä päi-vää. Me ollaan Suomessa vähän jäljessä, siihen on monta eri syytä, mut, tota... Ehkä tää vuosi tulee oleen se kaikkein isoin ja ratkaisevin Suomessakin, että nyt kun isot pelaajat aloittaa näillä isoimmil-la konsepteilla niin nähdään sitten, että mihin tää kuluttajien käyttäytymismalli tulee sitten meneen. Suomi on kuitenkin aika teknologiamaa, mutta ihmiset on aika varovaisia maksukorttien käyttäjiä verkkoympäristössä ja muualla näin.”

Substitutes. Development has canni-balized own business.

”Se on hauska aina, miten noihin luureihin esimerkiksi tulee seuraavaks, sinne ollaan kannibalisoitu kamera, ol-laan kannibalisoitu GPS tai verkkopai-kannus, [epäselvää], et yks driveri tulee olemaan mobiilin ostaminen.”

SOA, SAAS as substitutes

”… kaikki on nykyään yleisesti otta-en, lähes kaikki SOA, elikkä arkkitehdit on SOA-arkkitehtejä joka tapauksessa. Mut sitten uusina asioina tulee niinku tällai-nen suorituskykyyn liittyvät asiat, jotka on niinku äärimmäisen tärkeitä. Et siinä ja siel tapahtuu kehitystä mun nähdäkse-ni koko ajan, aika paljon.”

Potential entrants. Is it difficult to enter the markets?

”Toi on hyvä kysymys. Mä en näe sitä niin yksselitteisesti, että toimijoiden mää-rä esimerkiksi kasvais, vaan – tai vähenis, kumpaakaan – vaan, että varmaan aika pitkälti riippuu siitä, että minkä tyyppinen

26

tilanne on tähän asti ollut. Operaattorit-han on hyvä esimerkki siitä, että niissä pelikentissä on oikeestaan on aina ollut suhteess vähän toimijoita johtuen nyt tietty jostain itsestään selvistä tekijöistä, siis säätelystä ja investointien kalleudesta ja tällai. Sit taas moniss muissa toimialois-sa, jos nyt puhutaan vaikka näit meillä, niinku, digimainospuolella lähellä olevia toimijoita, jotku tietyt softatuotteet, muut ohjelmointitoteutukset, niissä taas toimi-joita on paljon. No nythän konvergenssi on esimerkiksi operaattoripuolella vois mahdollistaa sen, et moniss semmosiss palveluissa, jotka on ollu, niinku, yksin-omaan operaattoreiden tarjottavissa, niin konvergenssihan voi avata ovia mo-nille uusille toimijoille tiettyihin yksittäisiin palveluihin. Ja siitä joku VoIP-puhelut on varmaan yks hyvä esimerkki siitä, tai nii-den varaan rakennettavat jutut. Konver-genssihan on siinä, niinku, välttämätön semmonen alusta. Niin, tota, semmosiss tilanteissa toimijoita taas voi tulla lisää, mut vastaavasti sit taas joissain muissa tilanteissa – lähinnä mä nyt mietin jotain ohjelmistotuotteita, jotka on tähän asti voinut sisältää paljon eri toimijoita sen takia, että kukin toimija on keskittynyt johonkin tiettyyn nicheeseen tai muuten rajattuun alueeseen, missä on sitten ent-ry-barrieria ja muuta ollut olemassa sen verran, et noissa tilanteissahan sitten kon-vergenssi voi sitten johtaa siihen, et sielt toimijoita lähtee katoamaan sen takia, et nää nicheet menetetään.”

”Se niinku, ettei tarvi huolehtia täl-laisista perusjutuista, ei sua palvelunos-tajana vois vähempää kiinnostaa pyö-ritättekö te jollain Solarikselle, Linuxilla, whatever, kunhan se tarjoaa [epäselvää] paljon vaikka jotain page-view’ta tai mitä nyt tarvitaan siellä palvelussa, tai jotain kaistaa tai jotain vääntöä, niin, ei sua pal-veluntarjoajana kiinnosta pätkääkään, et

se on, vaikka sä tekisit sillä puolella vaikka miten paljon innovaatiota, et “meillä on tällainen verkko, meillä on tällainen juttu”, niin sit se loppukäyttäjä, et kyl siinä niinku sellaisen, siinä on tapahtunut, mitä aina jokaisessa bisneksessä, et... aikasemmin piti tehdä kun ei ollut, mut nyt siitä on tullut commodity, bulkkitavaraa, ja se on ihan älytöntä käyttää energiaa sellaisiin juttuihin, jotka ei oikeesti erota sua sieltä massasta, tai ei siitä palvelusta parempaa loppukäyttäjän kannalta. Se on ehkä se, et siinä mielessä sen teknologian tai tiettyjen teknologioitten merkitys on vähentynyt, ja itse asiassa ehkä se yleisin merkki, mistä paljon nyt käydään keskustelua, puhu-taan näistä social networkeista, mikä on taas vaikka joku Facebook esimerkkinä, niin okei, ne on saanut mielenkiintoisen aseman markkinassa, mikä niillä on joku 130 miljoonaa käyttäjää tai whatever, mut se, että nyt se skaba käydäänkiin siitä, että miten pystytään hyödyntämään sitä käyt-täjätietoa, profiilitietoa muissa palveluissa ja se on nyt ikään kuin siinä henkilödata ja profiili ja identiteetti ja kaikissa näissä jutuissa se juttu, ja siinä ei keskustella siitä, että saadaan perusbitit liikkuu jossain pe-rusverkkotasolla, vaan se skaba käydään siellä [epäselvää] Facebook [epäselvää] tai jotain Google Friend Connectia ja siinä se taso, et sun ei tarvi palveluntarjoajana... Sä lähet, tai sulla on paljon enemmän juttuja käytettävissä, sun ei tarvi, tää hyvä esimerkki aikasemmin, että laitoit jonkun firman pystyyn, niin sun piti miettiä, että haluut jonku sähköpostipalvelimen tai jotain vastaavaa, eihän kukaan enää, tai ehkä joku jaksaa pyöritää sitä sähköpos-tipalvelinta itse, ehkä, no siis... eihän yks-kään, tai hyvin harva start-up, hyvin harva aloitteleva firma rupee rakentaan mitään tollasta, ton tyyppistä toimistoinfraa, et se on ihan täysin turhaa, et kaikki, kaiken saa palveluna verkosta.”

”... ehkä se muuttaa sillä tavalla muotoaan, mikä on... minkä mä konk-reettisesti nään, ja uskon, että se tulee jat-kossakin olemaan, on että on pienempiä yrityksiä, jotka keskittyy tiettyyn teknolo-giaan, tiettyyn osaamiseen. Taas sitten suurimmat kokonaistoimittajat, me ol-laan monessa hankkeessa, niin ostetaan alihankintana sitten tää erityisosaami-nen. Varsinkin jos se ei oo niinku... jos se on hyvinkin rajattua. Vaikkakin saattaa olla kasvavaa liiketoimintaa, niin se oste-taan alihankintana, että jos vähänkin se liiketoimintamalli muuttuu, niin hyväksy-tään se, että itsellä ei oo pakko olla kaik-kea. Ja sit toisaalta nähdään strategisesti semmoseksi, että se liiketoiminta alueena kasvaa merkittävästi tulevaisuudessa, niin silloinhan tapahtuu niin, että jossain perustetaan sitten osaamisyksikkö, joka sitten levittäytyy globaaliksi osaamisisek-si ajan myötä.”

New entrants face a math of big num-bers

”… pitäs päästä siihen isoon N:ään. Suomess on se reilu viisi miljoonaa ihmis-tä, niin se ei niinku heittämällä, vaikka ois kuinka hyvä bisnessman, niin sitä ei niin-ku ihan heti pysty kasvattamaan. … Se ei oo silleen myyntipuheenvuoro, et – niin-kun se vaikuttaa – kun on miljardi käyt-täjää. … Siitä lähtee niin iso N liikkeelle. “

Industry rivalry. Convergence is in-creasing the competition along with new opportunities.

”… tommonen paradigma --- sa-malla tavalla kuin aikaisemmin todettu tää kilpailun lisääntyminen ja liiketoi-mintamahdollisuuksien lisääntyminen samanaikasesti. Niin, muiden yritysten kannalta sit samanaikasesti palveluiden määrä, ylipäänsä vaihtoehtojen määrä kasvaa, mut sitten vastaavasti enemmän

27

osaamista tarvitaan niiden käyttöön ja valintaan ja operointiin, että.”

”… yritysten ja toimialojen kannal-ta, joihin konvergenssi lähinnä vaikut-taa välillisesti, niin niiden kannalta ehkä yks isoimmista vaikutuksista on se, että nimenomaan palveluiden valikoma kasvaa. Ja sehän nyt siis tarkoittaa luon-nollisesti niiden kyseisten palveluiden tar-joajien kannalta, jotka on siis enemmän näissä konvergensseissa, verkkojen ja niiden palveluiden operoinniss mukana, niin, niillähän nimenomaan sama asia tarkoittaa kilpailutilanteen kiristymistä. Että VoIP-puhelut, tai ylipäätänsä puhe-viestintäpalvelut, on varmaan hyvä esi-merkki siitä. … toimijoita, jotka ei itse sii-tä VoIP-puhelun välityksestä välttämättä hae rahaa ollenkaan, vaan ansaintalo-giikka perustuu johonkin mainostuloihin tai johonkin muuhun tällaiseen, niin, täl-lähän on sitten kilpailutilanteessa sikäli radikaali merkitys, et ne toimijat, joilla se ansaintalogiikka on ollut puhtaasti sen toiminnan varassa, mitä joku muu tulee tarjoaan ilmaseks, niin sen vois kokea jopa haastavana.”

Some key players might want to slow down the progress in order to protect their own businesses.

”… tietty osa toimijoista, niin, täm-mösessä konvergenssi kun etenee, niin on usein herkästi tilanteita, joissa on järkevää koittaa suojata omaa liiketoi-mintaa. Toisin sanoen, koittaa estää konvergenssia tai tehdä jotain muutok-sia siihen. Siis esimerkkinä vaikka se, että jos on nyt riittävän iso operaattori, joka teettää matkapuhelinvalmistajalla koko-naan omia laitteita, niin niissä kannattaa rajata, niinku, joidenkin rajapintojen ja verkkojen käyttöä ihan ihan sen takia, et suojelee niit omia kanavia, mistä rahaa pystyy tekeen.”

”Niin... Taisin mainita sen aikasem-min, et on tietty todennäköistä ja kieltä-mättä järkevääkin, niin, monen toimijan kannalta pyrkiä kehityskulkua hidastaan ihan vaan omien tähän asti hyvien ase-mien suojaamiseks, että siitähän ei pääs-tä mihinkään.”

Global big players will continue to ex-pand and make the efforts to lead the development along their own paths.

”… mitä varmaan tulee jatkossakin tapahtuun, niin – nää globaalit isot toi-mijat, niin nehän varmaan jatkaa hyväks havaitulla mallilla, niinku laajenemistaan ja toisaalta tommost tilanteiden lukitse-mista omaksi edukseen, ja varmaan tek-no- ja sisältäpuolenkin pienii firmoja, niin, kaupaksi ulkomaille menee, nimenomaan niinku konvergenssiinkin liittyen ...”

The benefit of big numbers, masses of users.

”Siellä on iso asia, mikä on ihan siis phenomenal, et on tietysti, hyvänä esi-merkkinä voin tietysti käyttää aina tuota Applen Application Storea, 500 miljoo-naa [epäselvää]. H: No, joo. VP: Se ei oo niinku “joo”, se on vaan, että “se on iso”. H: Tosta muuten hyvä esittää kysymys, että mitä se on tehnyt toisin kuin esimerkiksi Nokia? VP: Hyvä kysymys. Käytettävyys on ollut niin hyvä, sieltä on päässyt se-lailemaan niitä, hinnat on kohdallaan, helppo maksaa.”

”… niin sen tuotantokustannukset Googlelle ne on alle dekadin siitä, mitä meillä, ja aika harvoin se Gmail nurin on ollut tai, ja näyttää siltä, että tulevaisuu-dessa vielä vähemmän, koska ne on nyt rakentamassa tällaista globaalia mallia, jossa vetämällä henkselit minkä tahansa serverifarmin yli, yhtään ainoaa hakua tai Gmail-asiakas ei värähdäkään, että sellai-nen dedudanssi* pystytään tuottamaan

niin valtavalla kuluttajamarkkinassa luo-dulla käyttövolyymilla ja massalla.”

”… joka näyttää, että se on Goog-len aikaansaamista, ja musta Google on ensimmäisiä ja ainoita, mitä mä oon nähny, joka kääntää kokonaan tän lii-ketoiminnan kehittämisen paradigman niin, että kun normaalistihan me ollaan toimittu kaikissa matkapuhelinpalveluis-sa ja ulkomaan kaukoliikenteessä, kai-kessa televiestinnässä, IT-järjestelmissä, tietojärjestelmissä, ensin yrityksille, sitten hinnan laskun myötä, Mooren laki pro-sessori kehittyminen, sitten kulujallakin on varaa, sit ne siirtyy. Nyt Google tulee toisinpäin, eli Google valtaa tavallaan kuluttajan mielessään, ja varmaan aika harva enää, jolla Google ei oo niinku alo-tussivu, niin luo sieltä aivan ylivoimaisen kustannustehokkuuden ja laajan asia-kaspeiton … niin nyt oli joku Merrill Lynch tai joku tällainen iso oli ottanut koko säh-köpostijärjestelmän Googlelta, ja kysyin heiltä, että meillä on vähä tää sisäasi-anministeriö ja puolustusministeriö sitä mieltä, että serverit pitäis sijoittaa maan sisäpuolelle ja sitten tulee tää Googlen paperitehdashanke, niin nyt ei sitäkään argumenttiakaan enää. Että tavallaan niinku pystytään jopa tekemään vaativil-le asiakkaille.”

Operators’ role as a byte pipe provider versus content providers’ business on a higher layers. Bytepipe provider has a further challenge in pricing, which has shifted from the transaction to flatrate.

”… että sillä ei oo niin merkitystä kenellä se fyysinen infra on, että kenellä se on hallussa, vaikka aina operaattorit varsin vierastaa tätä bitpipea, tai bit-tiputki tavallaan kuvausta tilanteesta, niin sitä se kuitenkin on ja siihen se on menossa, ja se on ihan ok. Ja se on peri-aatteessa jonkun pitää bittejäkin siirtää,

28

ja se voi olla ihan hyvää bisnestä, mut-ta siinä on tietysti puhutaan tällaisesta commodity-tuotteesta … Eli toi se, mitä vois tapahtua on se, että tulee kehitty-mään nää kerrokset vielä lisää, sulla on se infra, sitten sulla on palvelut sen pääl-lä, ja se kaikkein mielenkiintoisin juttu tapahtuu siellä ylempänä tossa – ja tää koskee niinku verkkoja, tää koskee pääte-laitteita, koskee kaikkia, se perusinfran on aika standardi tai tosi standardi tavaraa, sulla on IP-verkko, ja sulla on standardi-palvelimia, sulla on standardi kaikkea, ja siellä muutamat isot pelurit, jotka tekee niitä juttuja. No sit sen päälle tulee se, tai innovaatiot tulee pääasiassa sinne ylemmillä tasoilla, et periaattessa jos kat-soo just näitä ikään kuin isoja toimijoita tällä hetkellä niinku Google, Facebookia, mikä tuli jo tuossa mainittua, niin ei niillä oo ollu tarvetta rakentaa omaa verkkoa, [epäselvää] Google ja Facebook myös, ne pyörittää vain [epäselvää], ei tarvi tehdä sitä ihan sieltä alimmilta kerroksilta sinne ylös, se mielenkiintoisin toimi tulee siellä korkeemmalla siellä palvelukerroksessa”

”… murroksia, liiketoimintamielessä varmaan iso asia on ollut tää laajakais-tapuolelta tullut ikään kuin flatrate-hinnoittelu, että se aikasempi liiketoi-mintamalli, joka perustu transaktioihin tai aikavelotukseen, niin se on varmaan tulossa tiensä päähän, ja tästä voisko sanoa verkkoinfrasta on tulossa jonkin-lainen utility-asia.”

Operators are facing a challenge of how to compete, how to differentiate their services.

”… Se niinku, ettei tarvi huolehtia tällaisista perusjutuista, ei sua palve-lunostajana vois vähempää kiinnostaa pyöritättekö te jollain Solarikselle, Linuxil-la, whatever, kunhan se tarjoaa [epäsel-vää] paljon vaikka jotain page-view’ta

tai mitä nyt tarvitaan siellä palvelussa, tai jotain kaistaa tai jotain vääntöä, niin, ei sua palveluntarjoajana kiinnosta pät-kääkään, et se on, vaikka sä tekisit sillä puolella vaikka miten paljon innovaa-tiota, et “meillä on tällainen verkko, meil-lä on tällainen juttu … mut nyt siitä on tullut commodity, bulkkitavaraa, ja se on ihan älytöntä käyttää energiaa sellaisiin juttuihin, jotka ei oikeesti erota sua sieltä massasta, tai ei siitä palvelusta parem-paa loppukäyttäjän kannalta.”

”... tässä on ehkä näitä luovan tu-hon ja uuden ajatusmallin ehkä sitten taas tällaisia ääritapauksia, että jos sä haet liiketoimintatapamurroksia, niin yks murros on se, että nää muutamat gorillat löytää sieltä kuluttajamarkkinasta niin huikean kustannustehokkuuden, että ku-kaan yritysmarkkinassa, jos ne sinne ha-luaa, ei pysty hinnallisesti kilpailemaan, vaan se, että onko jotain muita keinoja differoida sitten ja ymmärtää paremmin asiakasta.”

Competition between the content pro-viders is also related to the competition between the operators.

”Joo, tässä voi olla käynnissä sella-nen ilmiö, että tommoset – vaikka sisäl-löntuottajat niin ku MTV kolmoset – niin saattaa olla helisemässä siinä tilanteessa ku televisio ja internetti on sulautunu yh-teen. Tää nykynen laitetelevisio, mää en usko että tää on vaan välivaihe, johtaa siihen, että sää – siitä sun kuvaruudul-ta napin painalluksella aktivoit – jotkut maksukanava plussan, maksu HD:n it-telles ja se välittömästi provisioituu sulle ja seuraavassa laskussa näkyy vähän enemmän hintaa, mutta sää voit myös napin painalluksella sen sieltä sulkea, jon-kun maksukanavan. … siinä voipi käydä näin, että sellaset perinteiset sisällön-tuottajat on helisemässä … vaikka joku

mikä hyvänsä Sony tai joku joka tuottaa sisältöä, kustantaa televisiosarjoja, se on siellä toisesssa päässä ja toisessa päässä asiakasta lähinnä on se operaattori, jol-ta tilaat laajakaistatelevisiopalvelu että ylipäätään sitä televisiokuvaa tulee siel-tä laajakaistan kautta, niin että en mää osaa kyllä sanoa, että ketkä siinä välillä tulee säilymään hengissä, mutta sano-taan nyt näin, että jos aattelee, että me ainakin ollaan tähän mennessä ostettu sisältö jostakin, niin KTV:ltä me ostetaan, laajakaistatelevisioon jotain sisältöä, et me ollaan nyt päästy siinä ravintoket-jussa vähän ylemmäs tähän laajakaista television avulla kun me ruvetaan niitä tallentamaan palvelimille.”

Increased competition is both bringing foreign companies to Finland and mov-ing the design tasks to cheaper labor countries. There is some room for niche players, though.

”Eli haetaan kustannustehokkuut-ta, jota sitten haetaan sitten joko sillä tavalla, että tarjoaja pystyy tekemään off-shorena halpojen työvoimakustan-nusten maissa töitä – puhtaasti, niinku intialaiset yritykset, ja intialaiset yritykset-hän nimenoman toimii jo Suomessa ja Pohjoismaissa hyvin vahvasti … me pu-hutaan delivery center networkista, elikkä meillä on globaali verkosto, jossa Intiassa meillä on käytännössä varmaan 40–50 000 ihmistä.”

”… nää intialaiset pelurit kasvaa, me liitytään yhteen … perusolettamus on, että kun on riittävän iso, sulla on glo-baali peitto elementti, millä pystyt kilpai-lemaan kustannustehokkaasti. Ja nääki saa keskenään isoista diileistä. Samaan aikaan tää totta kai synnyttää sitten täl-lasiaa niche-pelureita, jotka tietyillä alu-eille, tietyissä segmenteissä omaa sellais-ta tietotaitoo, josta se maksettu premium

29

on suurempi ja pystyy sitä kautta, tota, elättään itsensä …”

Open source, SOA and SAAS are shap-ing the big players’ competitive future.

”Microsoftin viimeisimpänä vetona on myös lähteny tähän palvelubisnek-seen hyvin voimakkaasti, eli pyrkii hyvin, tota, selkeesti laajenemaan tästä pe-rinteisestä roolistaan lähemmäs, tuota, meidän kaltaisia toimijoita. Ja taas totta kai, mitä Google tekee, niin mitä tahan-sa Microsoft tekee, niin Google pyrkii tekeen sen vielä paremmin ja ilmaiseksi. Tai hyvin edukkaasti verrattuna taas sit-ten Microsoftiin, eli heillä tuntuu olevan tämmöinen niinkuin copycat-tyyppinen kilpailu. Välillä ei tiedä, että kumpi seu-raa kumpaa, mutta ratkaisut, mitä ne tuottaa markkinoille on hyvin saman-näkösiä. Nostaisin noiden rinnalle vielä tän vielä niinku vahvemmin tän Open Source -pohjaisen kehityksen, koska siellä on, jos nyt kattoo suurii muutoksii, niin siellä tulee sellaiset tekijät ja pelurit, jotka aikanaan tulee laittaan IBM:t, Oraclet, tämmöset isot, vakiintuneet kaupalliset softa-vendorit ihan eri muottiin kun ne tänä päivänä on, että... Toi trendi on itse asiassa jo näkyvissä. Tulee vaikuttaan myös Microsoftiin tuossa sovellus- ja yri-tysohjelmistopuolella.”

”… niin aika iso osa menestyneistä IT-yrityksiä tänä päivänä, nimiä mainit-sematta, mutta suuria systeemi-inter-graattoreita, mutta niidenhän pääbisnes oikeestaan perustuu tällaseen projekti-työhön, jolla sovitetaan keskenään so-pimattomia järjestelmiä, ja silloin taval-laan tällainen SOA, avoimen maailman arkkitehtuuri, johon nimenomaan nää webbipohjaiset palvelut tarjoaa todella tavalla fiksun tavan, niin tullaan näke-mään varmaan tällainen merkittävä tuottavuushyppy, eli tämmönen SaaS, tai

palvelut täältä cloudista … ja tässä mä nään, että jopa vielä operaattorikenttää suuremmaksi nousee haaste täällä ohjel-mistoteollisuudessa, jossa nää perinteiset lisenssipohjaiset ja propri*-ratkaisut ja huonosti yhteensopivat, jotka on elät-tänyt sitten suuren joukon tämmösiä, meillä on esimerkkinä, etä hyvin paljon puhuttiin kun toimialla meni hyvin, että on tämmönen z toimijoita z accenture-ja ja tietoenattoreja z dataa ja tällaisia, niin nehän oli aika lihavia ne projektit, ja se tapa toimia oli sellainen, että raken-nettiin järjestelmä, jonka jälkeen kaikki muutoksetkin oli aina tehtävä sen kysei-sen organisaation kautta … että jos tän ottaa Accenturelta, niin se on semmonen 6 kuukautta ja vähintään miljoonan dol-larin projekti, että me tehdään se kolmes-sa päivässä tällaisena webbipohjaisena – ja se on ihan totta … että joku Kone Oy ja Nokia otti käyttöön z SaaS-pohjaisen järjestelmän, oli vaan signaali siitä mark-kinasta … ei oo hirveen monta vuotta ai-kaa kun mekin tutkittiin, talossa oli siihen aikaan joku 7–8000 ihmistä, niin löydet-tiin penkomalla kaikki filet, että meillä oli jotain 16 000 Oraclen lisenssiä … täähän tukee tämmöstä verkkosentristä maail-mankuvaa ja mehän nyt ollaan vuosi-kymmenet verkkoja rakennettu, mutta ei varmaan rakenneta, eikä laskuteta eikä toimita enää sillä vanhalla mallilla, että nyt on niinku meidänkin löydettävä uus vaihde ja uus näkökulma …”

From competition towards coopera-tion.

”Ei, ei – tässä on kaks kenttää – yks on se et teollisuus standardoi asioita, elik-kä koko teollisuus rakentaa sitä alustaa, ja sen jälkeen kilpailu käydään eri tasoilla siinä. Ja on kilpailua, esimerkiksi Micro-soft-Nokia on hyvä esimerkki, niin on kilpailua ja positiivista yhteistyötä. Kaikki

isot pelurit, niin nehän sekä kilpailee että tekee yhteistyötä. Et sitten strategiat voi olla hyvinkin erilaisia, ja ne voi muuttuu matkan varrella …”

(Generic) competitive strategies. With-in the services, pricing is not a source for competitive advantage, consumers have got used to free services and are used to banners

”… kun joku toimija kuluttajille, tai asiakkaalle ylipäätänsä, tarjoaa ilmaisek-si, niin se on niin vahva kilpailukeino, siis – ollu aina – että muilla kilpailukeinoilla varustautuneet, niin ne on kyllä mones-sa tilanteessa kyllä hätää kärsimässä. Et, toki löytyy sitten tilanteita oikeestaan aina kun mainosrahotteisii palveluita, niin ja jonkinlaista ääriliikettä tai bisnes-käyttäjää tai muuten vaihtoehtoihmisiä, -yrityksiä ollu, jotka on sitten ollut valmiit maksaan siitä, että ei tartte mainoksii kattella, mutta. Kyllähän toistesek nimen-omaan tää ilmaisuus kilpailukeinona on ollut niin vetävä, että...”

”… se mitä ihmiset … on halukkai-ta maksamaan, niin siellä – ikävä kyllä, vaikka ehkä toimijat muuta haluaa – niin esimerkiks premium-palveluiden aika alkaa olla ohi, ne pitää pystyy paketoida jonkinlaiseen kuukausimalliin, … koe-taan, että netti on ns. ilmanen, niin myös mobiilinetti pitäs olla ilmanen.”

”... Tää on niinku miten kuluttaja ko-kee sen hinnan, et se on ihan avaruutta. Ja sit toinen asia on sitten se, että se raha on aina jostain muusta pois, niin kyl se pitää aika tarkkaan katsoo, että jos aja-tellaan, että sulla on 10 yksikköö tai 100 yksikköö käytettävissä, sit kun katsotaan miten se eri core-ryhmissä jakaantuu, niin tappeletsä farkkujen kanssa, tappe-letsä leffalipun kanssa vai minkä kanssa sä tappelet siitä, että sä saisit jotain sii-hen laitteeseen? Ei mulla oo siihen niinku

30

mitään sellasta muuta kommenttia ku se, että kyllä tänä päivänä ihmiset on val-miita kuluttamaan, se ei oo mihinkään hävinny. Et kyllä hanakasti [epäselvää] lompakon tuota nyörit, mutta se, että mihin se raha käytetään on se kysymys.”

”… Bill Clintonin neuvonantaja näis-sä uusmedia-asioissa, että netin kautta kaikesta kontentista tulee ilmaista, sisäl-löstä tulee ilmaista, ja se itse se sisältö toimii vain mainostuksena maksullisille palveluille, lisäarvopalveluille tän sisäl-lön päällä. Mun mielestä siinä on se ydin. Jolloin tullaan siihen, että se operaattorin rooli on siinä, et se voi periä hintaa pal-veluista, jotka liittyy sisällön helpompaan löytämiseen just siinä reaaliaikaisessa tarpeessa, eikä niinkään sen sisällön myy-misessä, koska se sisältö voi olla jo lähtö-kohtaisesti ilmaista.”

Service providers have to differentiate.

”… se et sä tuuttaat kuukaudess gigatolkulla kamaa yhdeksällä eurolla tohon päätelaitteeseen, niin sehän oli märkä uni vajaa 10 vuotta sitten, niinku oikeesti ja se lentää ihan hyvää vauhtia. Toinen on se, et päätelaitteet on oikeesti nyt niitä multimediatietsikoita ja se, et päätelaitepuotella, niin se differentointi tapahtuu enemmän ja enemmän softan kautta, et siellä ei oo, jos sä otat iPhonen, otat HTC:n, HD:n, ota Sonyn, ei vaan, otat Nokian, otat Xpressin, ne on niinku läpy-köit, joissa on värinäyttö, nettiyhteys ja kosketusnäyttö. … hei, siis kuka tahansa saa rautaa kaupast, sitä on niinku ihan tarpeeks, nyt kyse on, et kyl se on se, mitä sillä tehdään. … Tottakai se design on edelleen tärkeetä, brändi on tärkeetä, onks se Nokia, Samsung, LG, SonyEricsson, siis ne ei oo niinku mihinkään hävinny …”

”… meillä on tällainen verkko, meil-lä on tällainen juttu … mut nyt siitä on tullut commodity, bulkkitavaraa, ja se on

ihan älytöntä käyttää energiaa sellaisiin juttuihin, jotka ei oikeesti erota sua sieltä massasta, tai ei siitä palvelusta parem-paa loppukäyttäjän kannalta. Se on ehkä se, et siinä mielessä sen teknologian tai tiettyjen teknologioitten merkitys on vä-hentynyt, … se on nyt ikään kuin siinä henkilödata ja profiili ja identiteetti ja kaikissa näissä jutuissa se juttu, ja siinä ei keskustella siitä, että saadaan perusbitit liikkuu jossain perusverkkotasolla, vaan se skaba käydään siellä … ”

”… ja varsinkin Suomessa, meidän ei kannata lähtee tekeen tällaisia [epä-selvää] ratkaisuja, et kyllä se pitää väkisin löytyy se oma kulma ja se erilaisuus, mut mä uskon paljon siihen, että pitää löytyy vaikka väkisin, että minkä takia se juttu, on se palvelu tai tuote tai vastaavaa, että miks se on erilainen. … sitten niitä muita etuja, et missä on kotimarkkinat [epäsel-vää] enemmän rahaa, enemmän tekijöi-tä tai näin. Kyllä sen pitää lähtee oikees-taan siitä innovaatiosta ja erilaisuudesta ja näin, pitäis löytyy se oma juttu, että se on [epäselvää] lähtee tekeen.”

”Täähän on just esimerkki niinku siis kaikki nää Apple ja nää sisältöpalve-lut niinku puhelimessa, operaattorilla. Sä maksat sen operaattorien laskulla, silloinhan se operaattori on tehnyt sen, että se on kustomoinut sen palvelun sillä tavalla, et sä voit maksaa sen puhelinlas-kulla. Sun ei tartte panna sinne sun luot-tokorttinumeroita, [epäselvää]. Se ei myy sitä sisältöö, vaan se myy sitä laskutusta-pahtumaa. Ja tätä ne ei oo niin kamalasti oivaltanut.”

Conclusions from industry analysis

From industry perspective it is inter-esting to notice that the interviewed informants are concerned with the contradictory trends of their respec-tive segments of the ICT industry and

the observations they make give sup-port for business drivers that may lead to both convergence and divergence within the ICT sector. From industry environment point of view the big players’ “known” or “established” rules (read: generally accepted trends in the industry) are rather well understood by the informants, but they also see the consequences of these changes to be rather blurred basically from two per-spectives, from the perspectives of cus-tomer behavior and industry structure.

From customer perspective the informants are concerned with the time scale required for the anticipated changes. Due to convergence and technological development many of the future services, tools, applications, and devices are already available for the consumers and business custom-ers, but the speed of adoption and the number of early adopters, especially in the current economic conditions, remains unclear. Also, the informants have identified that the new serv-ices and applications available require changes in the way how business cus-tomers and consumers use the serv-ices. Especially, among the business customers the need to change existing business processes and related busi-ness systems is a hindrance that the affects the speed of adoption of new things. The complexity resulting from a variety of different co-existing but con-tradictory technologies and respective business processes is a challenge – not only for customers but to for service, tool, technology, system, application, and device providers, too.

The technology and business process related complexity is similarly reflected in the industry structures within the ICT sector. In the light of the

31

research questions of this study, espe-cially related to the idea of the horizon-tals and verticals as extreme industry scenarios, it is interesting to notice that the blurring of industry borders and merging of different industries is resulting form the consumers’ side – a side that has often been seen to rep-resent the horizontal businesses – and not from the technological, i.e., conver-gence related side. This is an interesting notion as the motivation for the whole research project was to understand convergence and its effects on the ICT industries. If assumed that companies typically find their businesses in ver-ticals or horizontals, the way how the companies see and analyze their busi-ness environment and value chains does not seem to reflect this argument. Rather, contradictions such as small vs. big companies, entrants vs. dominant players, substituting vs. complemen-tary offerings, internet vs. mobile, safe-guarding existing positions vs. exploit-ing opportunities, and the emergence and existence of contradictory busi-ness models and value chains within an industry sector seem to capture the concerns of the interviewed inform-ants.

The law of big numbers, i.e., the need to create and serve big enough number of customers, appears as a concern that has roots in both sides of the industry dilemma, convergence and changing customer behavior. As convergence has resulted in a decreas-ing number of increasingly generaliz-ing converged technologies, the pure technology providers or technology integrators seem to face the need to change their business focus. Similarly, on the service side, operators and ap-plication providers find this changing

customer need in the form of diverg-ing new customer groups that behave in ways that they cannot understand nor anticipate. Thus, the ICT industry structures consisting of verticals and horizontals seem to be under pressure from two contradictory trends. First, those trends that strengthen the exist-ing verticals as companies try to shelter themselves against change by focusing on their core business vertical or trying to find new opportunities in other ver-ticals. This results in a zero-sum game between the existing players within an industry or a vertical. Second, those trends that are mainly coming from the consumer side and result in diverging customer groups with differing needs and behavior. In this kind of situation companies are trying to identify or de-velop new horizontally accessible seg-ments they try to serve and in which they compete against other companies with horizontally defined businesses. To sum up, the former represents a passive or adaptive strategy towards change whereas the latter represents an active and growth oriented strategy. An unfortunate case is that the majority of ICT companies seem to be found to have a passive or adaptive strategy. The key question remains as what would be a viable strategy in the future regarding the verticals and horizontals.

Business ecosystem analysis

Next we introduce the value network based ecosystem view that was used as one framework for analyzing the inter-view data of this research. The frame-work was originally published in Mess-erschmitt and Szyperski (2003), but was later extended in Warsta and Seppänen

(2006). Figure 3 below shows the inter-viewed firms positioned into the ICT ecosystem, in order to categorize their views.

The value network consists of eight types of actors and the end-customers, forming technology and ap-plication value flows. The actors operate in a network, so that some actors have closer interactions and synergies with each other than with the rest of the actors. Value creation is seen through three stages: development, integration and operation. This also means that the evolution of the business of an indi-vidual actor is heavily connected to the other actors, i.e. depends on the value network position of the focal actor and the interacting actors.

We will now analyze the interview data of each type of actor separately, and then summarize our main conclu-sions. Pieces of data will be used to il-lustrate and justify the analysis results. The analysis focuses, on one hand, on views to the present status and future developments of the wireless and mobile business and technology landscape. On the other hand, the role and actions of the focal actor type in case and its percep-tions towards the other types of actors in the ecosystem will be evaluated.

Consultants

As illustrated in Figure 1, the industry consultant analyzes and conveys the needs of a vertical industry segment or some horizontal business func-tions. The business consultant spreads these results into practice, especially when the same or similar applications have been addressed in other compa-nies. Basically the industry consultant focuses on the needs of all firms and the business consultant on adapting

32

Figure 3. The value network of the ICT ecosystem (Messerschmitt and Szyperski 2003; Warsta and Seppänen 2006).

applications in specific firms. However, consultants operate also in a reversed direction, as they promote application developers’ offerings to end-users.

The convergence of wireless and wired networks was pointed out by the interviewed consultants, emphasiz-ing that different kinds of wireless and fixed-line communication networks will be available and used at the same

time to form end-to-end solutions. Configurations of actual network usage patterns will depend on the use cases and applications and services in hand, not only on network parameters. An important matter to resolve will, how-ever, be if the change is driven by those companies whose business is to devel-op and operate networks, or by those who “merely” make use of them. It was

seen that the evolution of the business of the latter will increasingly shape the businesses of the former.

A related finding is that in Fin-land the ecosystem network has been sparse in the sense that can be only a few major representatives of cer-tain types of actors, such as operators – and for example consultants, too. Convergence is likely to open business

Application softwaredeveloper (ASD)

Infrastructure softwaredeveloper (ISD)

Systemand

infrastructureintegrator

(SI)

Application service provider(ASP)

Infrastructure serviceprovider (ISP)

End-user organizationIndustry, business and customer consultant (Cons)

Hardware developer(HWD)

Channel (Ch)

Application flow

Technology flow

Products Systems Services

S

Content RegulatorEducation

P

L

RQ

C

H

G

F

A

I

D

V

ON

M

T

K

U

B

J

E

33

opportunities for a remarkable number of new companies, which may howev-er have a longer way to reach a similar value network position than the exist-ing actors. The reasons for this will not be only technological, but change will depend much on socioeconomic fac-tors, consumer behavior, etc. In other words the convergence context is much broader than bare interoperat-ing and integrating technologies. So-cial aspects were seen to play a central role, especially when combined with low-cost or “no-cost” business models based on indirect earning logic.

According to the consultants of-ferings need to be packaged, be they products, services, connections or con-tent. Integration and interoperation must span over industrial borderlines, as opposed to vertical industry-specific end-to-end solutions. In part for this reason it will be even more difficult to cause lock-in effects in the ecosystem’s value network, and smaller players may give up and become merged with oth-er, bigger actors. This kind of phenom-enon is familiar from many past domi-nant segments of the ICT industry, and also from software businesses.

The emergence of mobile TV, both as technology and service, has been slower than expected, to mention one specific case. What exists is more an early application than any true service concept. The kind of volume and fre-quency of use necessary to make mo-bile TV a remarkable breakthrough are still missing.

Although technical convergence rests on IP, terminals and applications have been and will be diverging. How to effectively manage pivotal conver-gence points and make out of business from them are important questions.

There is a danger of partial optimiza-tions, and it will not always be easy to find aggregating and integrating par-ties that have, in practice, the power to create and manage whole value net-works or major portions of such – espe-cially because the networks will not be static but are still changing rapidly. The Asian model based on emphasizing the end-user perspective through strong aggregation parties (cf. Docomo) has been working, on one hand, but has resulted in quite closed systems, on the other hand. A special problem even in this kind of an approach is to hide the enormous complexity of even simple end-to-end solutions from the end-users.

Evidently, however, the pressure for the change comes from this per-spective, neither from operators, nor from vertical businesses or technology providers, and Internet paves a road for the change.

Example data from the consultants:

”Useita verkkoja on tavalla tai toi-sella samanaikaisesti hyödynnettävissä, ja sitä kautta ne nähdään, konvergoitu-neena jonkun tietyn käyttötilanteen tai palvelun kannalta.”

”[Muutos tapahtuu] sosiaalisen as-pektin kautta. Yhdessä sen ilmaisuuden kanssa, se lisää taas niitä mahdollisuuk-sia, että tämä mainosrahoitteisuus ja mainonta ansaintalogiikkana, voisi olla ihan vahvoissa asemissa.”

”Verkot konvergoituvat IP:n pohjalta, mutta sitten palveluntarjonta ja pääte-laitteet divergoituvat.”

”Et quassi [quality of service], quassi, quassi, se on se tärkein asia.”

”Osaoptimointia, että jokainen te-kee vain sen oman palasen ja sitten ole-tetaan, että ne nyt löytää toisensa, mutta

kuten mobiilitelevisiossakin näki, että jonkun täytyy sitten juosta se kasaan se koko verkosto.”

”Ihminen helposti yliarvioi lyhyen ajan kehitystä.”

”[Tulevaisuutta on] service-vetoinen malli. Ei tulekaan sieltä operaattorimaail-masta, vaan se tulee täältä internetmaa-ilmasta.”

”Et on lokaalia sisältöä ja on ylikan-sallista sisältöä.”

”Konvergenssin toteutuminen reali-soituu siellä loppukäyttäjällä.”

”Kun joku toimija kuluttajille, tai asiakkaalle ylipäänsä, tarjoaa ilmaiseksi, niin se on niin vahva kilpailukeino.”

”Googlella on niin valtava monopoli.”

To sum up, the key notions emerging form within the consultant group in-clude the following:1. Convergence of networks.2. Networks will overlap and firms will

use many networks.3. Products and services are being

packaged and service portfolios are widening.

4. Integration is extending over several industries.

Application software developers

The application software developer (ASD) produces industry-specific software applications. The ASD thus tries to max-imize its market share by attempting to meet the needs of the multiple end-user markets, and by emphasizing the company’s core competences, such as technical and project management skills in software development.

Indirect business models have become common also among applica-tion software developers. One of the main reasons is the consumer’s view that “Web is available for free.” The same

34

is expected to be the case in wireless and mobile Internet services. Media content sales has become associated with application software sales. Busi-ness under the same brand is impor-tant, in addition to networking with media content owners and aggregat-ing parties.

In order to successfully develop applications one needs a well-func-tioning infrastructure solution, not only technology. It is also required that the applications, or rather services, are being well managed. Services need thus to be systematically developed, operated and managed, and tools are needed for each of these areas. Cloud computing principles will extend and renew the existing software-as-service concepts. During the coming 10 to 15 years cloud computing will be a big issue, and in more general terms virtu-alization of infrastructures, applications and services. It can be expected that whole value networks, in other words industrial segments and maybe even industries, will participate in building cloud platforms, so that they collabo-rate and compete at different levels and positions of the clouds. Personalization of PCs attached to clouds may emerge, comparably to mobile terminals.

Various kinds of added value op-portunities will be sought – and found, based on data-centric and data-inten-sive services and applications. This is a new area for many players, and also for consumers who are not accustomed to it yet. Moreover, not only operators but all others who are involved in the emerging cloud platforms will have op-portunities to access and refine data for various kinds of value-adding needs. The key types of actors may still remain as they have been: operators, device

manufacturers, application software developers, and regulating parties. However, many of them will evolve from bare product businesses towards service businesses.

Operator managed networks have been rather closed, compared to the open Internet world. This will create a re-markable conflict, if and when IP-based convergence is proceeding. Big chang-es are needed in the existing closed net-work architectures, as well as in end-to-end application and service chains. A re-lated change is that mobile anything is not yet free, whereas Internet anything is “free” in the sense of flat rate expenses. Better understanding of new profit mak-ing scenarios are needed, which stem from understanding consumers and other kinds of customers – realizing that consumers have in part become pro-ducers, alias “prosumers.”

In general, it will not be too easy to create integrated and interoperable business processes and operational network-based end-to-end solutions between different types of actors. Many are seeking fresh views from service-based business concepts, but all cannot be service providers and operators who control the cloud or its key portions. Bigger actors that have taken the role of system and service integrators, will also face challenges to understand and manage new types of platforms, e.g. clouds, and all the proc-esses and businesses revolving around them.

Much has been talked and written about understanding customers and customer interfaces, businesses, and even legal issues, etc. However, tech-nology wise systems have been diverg-ing, and also application wise. Will the complexity need to be opened to the

end-users at all, is an issue, or are they only confirmed about certain service levels that are being agreed, and the related service models. In other words, there may be needs for great simplifica-tions at the customer end of end-to-end solutions: jump-and-go to the cloud.

Example data from the application software providers:

”Koetaan, että netti on ns. ilmainen, niin myös mobiilinetti pitäisi olla ilmai-nen.”

”Meidän liiketoimintamallin on se et me verkotutaan paikallisten sisällöntuot-tajien kanssa ja otetaan ne siihen meidän brändin alle.”

”Infran pitää olla ensin kunnossa, jonka päälle rakennetaan palvelunhal-linta, palvelunkehitys, kehitystyökalut ja jonka päälle sitten voidaan rakentaa palveluita.”

”Markkina-arvo on tällä hetkellä kui-tenkin huikea tässä [dataan perustuvas-sa] lisäarvoliiketoiminnassa. Ja sillä on valtavat potentiaalit olemassa, kuluttajat ei ymmärrä tätä, ja B-to-B-puolella ei ym-märretä sitä.”

”Tuotebisneksestä enemmän tai vähemmän siirrytään nyt palvelubisnek-seen.”

”Operaattoriverkot ovat jossain määrin suljettuja verkkoja, ja sitten taas maailma, missä internet toimii on avoin. Tämä on ristiriita, ja jos kuitenkin ollaan menossa siihen internet-pohjaiseen maailmaan, niin siinä pitää tapahtua isoja muutoksia, että siihen päästään.”

To sum up, the the key notions emerg-ing form within the application soft-ware providers group include the fol-lowing:

1. Business models based on advertising.

35

2. Cloud computing and virtualization.

3. PCs are becoming personal devices.4. Integration business is re-shaping

towards services.5. Mobile world = data costs, Internet

world = data is “free”.

Infrastructure software developers

The infrastructure software developer (ISD) has knowledge of a wide range of cross-industry applications, require-ments and the needs of application developers. The ISD thus benefits from the economics of scale from infrastruc-ture related standardization processes and outcomes, and operates in a close connection with hardware develop-ment companies.

Device manufacturer, mobile op-erator and Internet service provider channels have become important for infrastructure software developers. Both wireless mobile and fixed line solutions may need to be developed and submitted to customers via several channel partners. Because infrastruc-ture solutions have connections to technologies, applications and service operators’ systems, their development is quite complex today, compared for example to individual applications. Convergence is expected to create big business opportunities, but most of them cannot yet be foreseen. In the future the development of infrastruc-ture software is even more challenging, due to the extending scope of typical solutions and the widening areas of competences required. Despite of the increasing scope and complexity of the solutions, the business models in use

should be simple enough. Also many ISD types of companies have moved to make use of fixed service payment schemes with their customers. In other words, they are moving towards serv-ice businesses in the ecosystem value network.

Example data from the infrastructure software developers:

”Mobiili- ja sitten ISP, elikkä internet service provider -kanavana, sinne me on fokusoitu. Ja sitten toisaalta nää laiteval-mistajat.”

”Fixed-line ja mobiilia on niinku pitäs pystyä käsitteleen yhdessä.”

”Konvergenssi tuo aivan uusia mah-dollisuuksia, mahtavia mahdollisuuksia, joita on aika mahdoton tietää tässä vai-heessa.”

”Hajautettu tuotekehitys on erittäin vaikea. Me ei pyritäkään tekeen itse kaikkee teknologiaa, vaan ostetaan hyvin paljon erilaisia komponentteja eri puolilta.”

”Meidän bisnesmalli on palvelu, elik-kä kuukausittain laskutettava.”

To sum up, the the key notions emerg-ing form within the infrastructure soft-ware developer group include the fol-lowing:

1. Mobile operator and ISP channels.2. Fixed line and mobile solutions to

be developed at the same time.

System and infrastructure integrators

The system and infrastructure integra-tor (SI) specializes in the provisioning of software. The SI can emphasize its activities either on application or infra-structure integration. It acquires appli-

cation and infrastructure software from ASD and ISD supplier companies, mak-ing all the software to work together as well as installing and testing the whole system. Along time, the role of SIs has been significantly growing, as software and hardware brand owners are reduc-ing the number of their direct subcon-tractors (Warsta, Seppänen et al. 2005)1, and end-customers are increasingly looking for turn-key end-to-end system solutions.

System and infrastructure inte-grators have typically two kinds of sources for their earnings, one pro-vided by end-customers for the serv-ice or content, another by advertising partners. Content aggregation has become important, because Internet content is “free”. The content is there-fore a means to advertise some pay-ing services and applications, or needs to be aggregated and processed for added value.

Means to find and process relevant content are important, not only the processes for storing, managing and putting data available. This kind of ba-sic data and computing hosting servic-es have been outsourced by SIs already. Along the same lines, some traditional system suppliers are moving towards service aggregation businesses. In this business a SI does not sell bare con-tent, however, but content access and use transactions. This has not yet been recognized by all integrators and other players. For example, operators have plenty of real-time data on their opera-tive networks, but it is not being used much for anything yet. Advertising pro-filing needs may, in practice, serve as

1 Warsta,J.,V.Seppänen,etal.(2005).EvolutionofSecondarySoftwareProductBusinesses:MomentumofConcurrentEnterprising.11thInternationalConferenceonConcurrentEnterprising,UniversityBWMunich,Germany.

36

one driver for operational data access and deployment.

Related to this change, neutrality towards software and hardware vendors is increasing among SIs, in other words vendor neutral technology service pro-visioning. Moreover, as opposed to only integration platforms, service delivery platforms are needed. This requires new kinds of integration architectures and frameworks, whereas classic system in-tegration focuses on making such sys-tems to interoperate that were not origi-nally designed to be integrated and in-teroperable. Even the biggest domestic SIs will face heavy global competition.

Example data from the system and infrastructure integrators:

”Netin kautta kaikesta sisällöstä tulee ilmaista ja itse sisältö toimii vain mainostuksena maksullisille palveluille, lisäarvopalveluille tämän sisällön päällä.”

”[Datan] löydettävyys.””Perinteisetkin järjestelmäntoimitta-

jat esimerkiksi verkkolaitevalmistajapuo-lelta, ne on siirtymässä tyystin omassa tuotekehityksessä suoraan integraatto-reiksi. Se ei myy sitä sisältöä, vaan se myy sitä laskutustapahtumaa.”

”Vendor neutral technology service provider -rooli korostuu jatkossa.”

”[Kyse on]service delivery platformis-ta. Tällainen intergraatioarkkitehtuuri tai framework, millä näitä asioita tulisi ra-kentaa.”

”Se on kaiken A ja O nykyisin, tota, taas se operaattoriyhteistyö.”

To sum up, the key notions emerging form within the system and infrastruc-ture integrator group include the fol-lowing:

1. From integration to service delivery platforms.

2. Value-added content aggregation and access services, because content is “free”.

3. Heavy global competition.

Infrastructure and application service providers

The application service provider (ASP) licenses and operates applications, whereas the infrastructure service pro-vider (ISP) purchases and operates the required software and hardware infra-structures, like computers, operating systems, communication networks and data storages. During the past years the roles of ISP and ASP businesses has been remarkably strengthened, due to the use of communication networks as part of the comprehensive ICT infra-structure, as well as Internet and Web deployed not only as a distribution channel, but also as an operational platform for software-enabled services.

Several interviewed infrastructure service operators emphasized the in-creasing role of fixed-line networks as the “communication pipeline”. Televi-sion and Internet were expected to be integrated, considering also that high-definition TV will require much band-width, which will emphasize the fixe-line network operators’ position. WLAN was seen to become an important means for digital voice transmission, also in homes. Software-as-service and cloud computing will create a basis for a (new) computing paradigm, moving servers from offices and even homes to server farms. The number of infrastruc-ture service operators will for these rea-sons not explode, but on the contrary competition will lead to only a handful of big operators.

The role of TV is changing, it will no more be just a device, but a service

access point, including cloud-based data access. This access will change means to consume entertainment, services and experiences in homes. Flat rate-based pricing is needed, however, based also on the fact that the network has become a common utility. Internet in its current form already indicates the pace of developments of service deliv-ery and management platforms. Cor-respondingly, a “plug” will be available in TV to access all kinds of network op-erators, applications and value-added services in a HDTV level format. Music is not the only driver for this.

Thinking of application serv-ice provisioning, one scenario is that downloading of software applications will vanish entirely, or at least decrease dramatically, as opposed applications are run through the network. Facebook can be considered as a forerunner and role model, also with regard to virtual-anything kind of services. Compared to operator-based service platforms Face-book is active, not passive.

In other words, it can be seen as a data and communication repository capable of monitoring and messaging as a system, not only transmitting end-user activated content to other end-users, or pre-planned content at fixed times to everyone. Data streaming is a new approach to create service con-texts around individuals and communi-ties, so that products can be offered as interoperable services.

Example data from the infrastructure and application service providers:

”Televisio ja internet konvergoituu. Nykyinen laitetelevisio on välivaihe. Siir-rymme ravintoketjussa ylemmäs laa-jakaistatelevision avulla kun alamme tallentaa ohjelmia palvelimille. Koko

37

homma, niin sehän on menossa laaja-kaistaan.”

”WLAN tulee puheensiirtoon, myös koteihin.”

”Palvelimet siirtyvät palvelinkeskuk-siin. Tulee olemaan kolme isoa operaat-toria.”

”Internet nykymuodossaan, siitä on tullut selkeästi palveluiden jakelu- ja hal-linta-alusta. Operattori mielellään puhuu tästä reguloinnista.”

”Download-pohjaiset tuotteet tulee todennäköisesti, jos ei kokonaan häviä-mään, ne tulee ainakin vähentymään huomattavasti, jatkossa haetaan suo-raan verkosta.

”Virtuaalimarkkinointi tai virtu-aalileviäminen, vaikka just Facebookin kautta. Facebook-taso voidaan aatella ehkä aktiivisempana kommunikoinnin välineenä. Facebook on kanava levittää tietoa, nimenomaan siihen verkostoon.”

”Että kaikki kortit on annettu käteen, mutta mites näillä pelataan.”

”Sä et koskaan voi oikeesti kilpailut-taa enää sitä, kun se ensimmäinen propri [proprietary] –hämähäkki on iskenyt kiin-ni ja tehnyt sinne omat täkynsä.”

To sum up, the key notions emerging form within the infrastructure and ap-plication service provider group in-clude the following:

1. The role of fixed networks is growing.

2. Streaming model is proceeding.3. WLAN used for voice.4. SaaS and cloud computing based

services.5. The network infrastructure will

become utility.6. Facebook and other social

communities as role models.7. Pay-as-you-go world.8. User profiling data.

Hardware developers

The hardware developer (HWD) plays still an important role in the value net-work context, as it provides platforms for both infrastructure developers and system integrators. Their co-operation with ISD companies is especially inten-sive, because ISDs make use of plat-forms for their software products and services.

Hardware developers, or more gen-erally speaking device manufacturers, are active actors in the wireless business ecosystem. They have come up with many new technology-based product designs, usage-centered concepts and implementations. Many of the recent enablers are geared towards context-based and situational features, “smart-ness”. Although truly ubiquitous com-puting devices in the terms of intelligent sensing and actions are still waiting for their breakthrough, developments are moving towards this direction. At the same time, some “traditional” mobile applications and services have been ac-companied with early “smart features”.

Moreover, content access, owner-ship and management are key drivers also from the viewpoint of hardware platforms and device level system engines, including content aggrega-tion, value adding and other similar aspects already booming in Internet. Advanced devices can be seen to ben-efit this rather directly, too. However, comparably to network operators, de-vice-based access to usage data is not much exploited yet, not to speak of its refinement and use for businesses and individuals. This sort of operational data would provide for control points in the value network, but other aspects, such as privacy need to be carefully

considered. One especially remark-able aspect of the use of such data in business, if possible, is that it is being created automatically and all the time by the users, the network, the opera-tion centers and the devices. From the viewpoint of hardware developers op-erators appear sometimes slow in their pace to change business models.

Example data from the hardware developers:

”Tilanneälyä korostavia enablereita mukaan, niin sanottuja kontekstisidon-naisia asioita, navigaatiot ja liiketunnisti-mia ja hyvin paljon sensorianturitekniik-kaa.”

”Enää ei välttämättä puhuta mobii-lipalvelusta, vaan puhutaan persoonalli-sesta palvelusta.”

”Suurimpia kontrollipisteitä ovat ne toimijat, joilla on tieto siitä, ketä käyttäjät ovat ja tieto siitä, et mitä nämä ihmiset tekevät eli on olemassa käyttäjätiedot, on olemassa rutkasti metadataa niihin käyttäjätietoihin liittyen, mutta ne voi kontrolloida, myydä hallinnoida ja kaik-ki tietystä tulokulmasta ja varmasti tätä metadataa on paljon maailmalla hyvin monella toimijalla olemassa.”

”Operaattorit eivät ole kovin innok-kaita muuttamaan mitään liiketoimin-tamalleja.”

To sum up, the key notions emerging form within the hardware developer group include the following:

1. Access and usage of data from operational devices opens up new opportunities.

2. Hardware engines and devices play still an important role in the ecosystem.

3. Truly ubiquitous devices are still rare, if not unexisting.

38

Other types of actors

The Channel (Ch) type of an actor ap-pears in varied forms, extending from wholesale trade to retail shops selling packaged software till new forms of Internet businesses. These companies supply software as such, hardware as such or assembled PCs in different combinations. They were not repre-sented among the interview data. Regarding yet the three other types of actors, Regulators (Regul), Content providers (Cont), and Educational insti-tutes (Edu), the following pieces of in-terviews data illustrate their viewpoints in a concise manner:

Regulator on a critical business driver:

”Siinä keskustelussa on vastakkain ollut kaksi osapuolta, siinä on teleoperaat-torit toisena ja sisällöntuottajat toisena.”

Content provider on their future out-look:

”Subscription malliin uskon. Meistä tulee internetyhtiö.”

Educational institute on the interaction of key actors in the ecosystem:

”Et operaattori ikään kuin odottaa, milloin täällä on tarpeeksi käyttäjiä tar-vitsemassa kaistaa, palveluita, sama on tietyillä palveluntarjoajilla – palveluntar-joajat odottaa milloin on tarpeeksi väkeä vaatimassa ja haluamassa jotain hyviä palveluita – no sitten jengit taas joka on kohderyhmä siinä ja jonka pitäisi saada niitä palveluita ja haluta, niin se odottaa ehkä sitä, et milloin on verkko tarpeeksi kypsä, et sitten menee läpi tavaraa eli se on ikään kuin sellainen muna-kana on-gelma.”

”No samalla tavalla laitevalmistajat tekee laitteen, ne tekee tuollaisen kantti kertaa kantti ruudun, sitten sisällöntuot-tajat sanovat, että tehkää tuohon tava-raa. Ne ei vuoropuhelu keskenään – se on aika hankalaa syntyä sitä rahantekoa.”

Conclusions from the ecosystem perspective

Referring to what is said above, there seems to be polarization ongoing in the ecosystem value network towards two ends. Truly technology-driven busi-nesses are, on one hand, adding value by adopting software and integrating and partnering with formerly separate businesses. A much bigger change is, however, assumed to take place in the opposite corner of the value network: end-user centered businesses are in-creasing and involve not only ASP, but revolve much around digital content creation, access and management.

The latter is almost non-existing such value network schemes as shown in Figure 3, in part because they focus on system development (and operation), as opposed to system use. If this kind of evolution will proceed, the middle-men – system and application integra-tors – will have harder times. Moreover, especially infrastructure but also appli-cation service providers face competi-tion from content providers and even end-user communities. Contrasting the phrase quality-of-service (QoS) with something that could be called quality-of-content (QoC) illustrates the point.

One clear consequence would be the need to open up the consumption (or, “prosumption” area of the ecosys-tem value network, perhaps making use of some analogies from the digital

media industry, but noticing the emer-gence of a cloud computing type of infrastructures. One special aspect in this is to ponder the roles of broadcast-ing and cellular technologies, mobile terminals, TVs and PCs, and the inter-play between wireless and fixed-line networks.

SIs will face challenges and may consider moving towards operator businesses. However, infrastructure provisioning was seen to become more a utility business, which would cause the move to direct to ASP businesses.

Also ASP, as they are today, would change to become cloud operators for accessing, managing and adding value to digital content, and the related ap-plications – if they only could make the change to happen. Who would possess and make use of the data gathered in real time from operative systems, is a good question.

Although Facebook was brought up as a particular case and role model, the more general phenomenon behind it could be called socially enabled in-frastructures and services loaded with user created and shared data. Commu-nities of content prosumers may have much stronger effects on ecosystems and even industries as a whole, and in a way form a counterpart to pre-planned and organized value chains. Moreover, they will be an endless and vast source of information that has a potentially huge business value for various kinds of needs. “Quality of content” will mat-ter much.

Cloud computing is a tempting vision, but it will not be similar to the host-centered systems used in the sev-enties and eighties. On one hand, the

39

processing capacity in the leaves of the network will still be considerable. In other words, ubiquitous and context-sensitive devices are emerging and will be loaded with features. On the other hand, high communication and could computing costs are not toler-ated, value is consumed through the content. The complexity of end-to-end services will cause counter pressures to the costs, simple and cheap solu-tions will override complex and costly ones. For this reason “long tail earnings” based on access fees to such data for which someone is willing to pay, and indirect earning logic are needed. Real-time operative data is a good example of the former, content and application bundling, possibly with advertising, of the latter.

Obviously the cloud comput-ing concept needs to be opened up

in terms of its architecture, manage-ment and deployment. Then, the big issue is who will become cloud own-ers and managers, in practice, and how the positions and roles of the present ecosystem players are changed. In an even longer run it may happen that interest is directed to prosumer com-munities also in terms of emerging business opportunities. In other words, cloud ownership may become a utility management business. It is not pos-sible to know exactly how the value networks of the wireless ecosystems will be shaped in the future, but Figure 5 below shows some possible changes based on the findings discussed above.

When compared to Figure 5 be-low, which is a rather “modern” view to a content-enabled ICT business – video game industry, it is easy to see that the logic in the former is entirely different.

Value prosumption rules the ecosys-tem, including simultaneous crea-tion and use of content through “on-demand” applications, as well as data gathered from operative systems. The formerly prevailing technology and application development and system integration business are transformed to “enriched device supply”, and what is left from provisioning businesses is in-frastructure operation, associated with “device provisioning”. Cloud-related value functions have replaced, or actu-ally remarkably elaborated, application service provisioning type of businesses, not least by end-users and their com-munities becoming producers and consumers of content, applications and end-to-end services.

Figure 4. Prosumer-centered wireless ecosystem’s value network.

Cloud communities and end-users

Content &applicationcreation

Cloudaccess

Content &applicationenhancement

Value carrier flow

Value prosumption flow

Cloud use &management

Deviceprovisioning

Infrastructureprovisioning

Enrichteddevicesupply

Real-time data Value-added content,appliactions

Content, applications

Basic content,applicationsE2E servicesDevice access

Infra access

Devices

Digitalcontent

On-demandapplications

40

Figure 5. The actors and their relationships in the video game industry.2

2 Johns,J.(2005).Videogamesproductionnetworks:valuecapture,powerrelationsandembeddedness.Journal of Economic Geography,6(2006),151-180.

Games Retail value

Consumer

Retailer

Revenueminus retailingfee

Revenueminusdistribution fee

Distributioncontract

(often national)

Distributor

Publisher

In-house Publishing

Developer

In-house Developing

Key:

Actor

Exchange of goods or services

Financial transactions

Gamesdelivered

Gamecode

Finalgamecode

Licenseagreements

Supplierapproval

Financing Fixed feeorfixedpercentageof salesrevenue

Development kit

Sales Revenue Console ManufacturerRegional HQ

Negotiationshelf spaceand margetingstrategy

LicenseRevenue

GameCDmanufacture

Game code

Games and Consoles

41

Network analysis: Social networks in convergence

the innovations, resources and compe-tences according to possible new busi-nesses (Eliasson, 2005). On this basis the objective of this part of the study is to analyze how social networks are used to create new business while the industry dynamism is high.

Below is first reviewed shortly the results of the research on social relation-ships and networks in new business cre-ation. This is approached in such a way that the most important social factors are defined and discussed. The dimen-sions below are in line with the stud-ies by Tsai and Ghoshal (1998), Singh, Hills, Hybels and Lumpkin (1999) and Yli-Renko (1999). Then it is presented the key results of the empirical analysis. This is done by using the network action perspective on new business creation in a qualitative analysis of the interviews of the experts of converging networks. Consequently, it is suggested five mana-gerial ways of acting connected with new business creation in the dynamic business environment. In discussion it is note the implications of the network ac-tion perspective on new business crea-tion in dynamic business environment.

Theoretical approach: Social networking nature of business management in the new business creation

Social networking is here seen as social interaction, which could bring informa-

tion, resources, support and ideas un-der the new business creation of firms. Social networking could be divided into a structural dimension, relational dimension and cognitive dimension. The structural dimension refers to the amount of social interaction firms have with their social relationships, in other words, how active a firm is in social dialogue with its relationships. The re-lational dimension refers to the close-ness of relational ties, i.e., how much of the communication happens between personally acquainted people. The re-lational dimension is about how close the relationships are and how impor-tant relationships are to a firm. The cog-nitive dimension refers to emotional commitment to the relationship. More specifically, it is a question about how deeply the parties trust each other, how well they understand and support each other and how much the parties believe each other in case of problems.

Structural dimension of social networking

By structural dimension of social net-working is meant the structure of the social network, i.e., how many rela-tionships a firm has, how much social interaction a firm has, how dense the relationships are and what is the hier-archical structure of the network (cf. Tsai and Ghoshal 1998). It was claimed already by Peterson (1985) that firms in

Part  3Secondary analysis

Introduction

Tsai and Ghoshal (1998) in their semi-nar article indicated that firms must understand social relationships in or-der to be able to achieve temporal competitive advantage, i.e. create new business (see also Coleman 1994). It is here claimed that firms need relation-ships to get information, resources and opinions about their business oppor-tunities (Nahapiet and Ghoshal 1998). Elsewhere in management literature has been widely stressed the meaning-fulness and importance of relationships to frame complex situations and cogni-tively simplify the insecurity of business management (see, e.g. Burt 1992; Tsai and Ghoshal 1998; Yli-Renko 1999).

In the present study is assumed that the embeddedness of firms in networks of relationships means that relationships, and acting in relationship networks, are central determinants of the way how a firm creates new busi-ness (see Granovetter, 1985; Håkansson and Snehota, 1989; Anderson, Håkans-son and Johanson 1993; Gulati 1998; Håkansson and Snehota 2006). Present study proposes that firms in networks use different roles and behaviours in a discursive and negotiative man-ner trying collectively to organize the fragmented situation and allocating

42

the dynamic situations need around them a holographic, flat and personal network type of organization in order to ensure the needed information for new business creation. This suggests that information is crucial to firms in the dynamic situations and that hier-archical, formal and complicated sys-tem of relationships hinder the fluent flow of information. It also suggests that firms willing to discover business opportunities and exploit dynamism should be in the middle of informa-tion flows and be tied by personal ties to the most important informants (see also Sarasvathy 2001).

The idea of structural holes pre-sented by Burt (1992) is in line with the above. He proposes that firms should be able to create new business when they are in the middle of two or more networks and when these networks have links to each other only through the firm. Then the particular firm is structurally in the position where it can exploit and connect the informa-tion from all the networks without the risk that someone else is doing it also. Of course this is an ideal situation and unlikely to exist as such in reality. How-ever, structurally loose and dynamic networks include information which is not shared by all the members of the network. Thus, there are information gaps that alert firms could recognize to be opportunities for business. Also many other studies have stressed the importance of networks, primarily the number of social relationships (Chris-tensen and Peterson 1990; Christensen, Madsen and Peterson 1994; Gunther McGrath 1994; de Koning and Muzyka 1996; Hills and Lumpkin 1997; Sigrist 1999). All the above studies suggest that the structure of social relationships

have an influence on business man-agement, and especially on new busi-ness creation, in dynamic and complex situations.

How does this structural dimen-sion work in the new business creation? Looking more closely at Burt’s (1992) ideas, he stresses that structural holes between networks make it possible for a firm to recognize new business op-portunities because in this situation it is in the position to receive information from different networks. This requires that the firm has enough relationships in general and that these relationships are loosely connected. This, then, could be interpreted so that a few close and strong relationships are needed. They need to be numerous enough in order to have access to a wider relationship network of weak ties. Weak ties are emotionally not that close relationships but they are known and it is possible to get valuable information through them (Granovetter 1973). It is proposed that many kinds of weak ties are the most important in new business creation. However, also a few strong ties are needed to gain social and emotional support to evaluate ideas, and to offer access to the contacts of strong-ties and contacts of contacts. As a whole, an active and wide base of relation-ships, both strong and weak, is obvi-ously extremely important in new busi-ness creation.

Further, Krackhardt (1995) studied the use of relationships in new busi-ness creation by using Burt’s (1992) theory of structural holes. Krackhardt (1995) proposes that a firm can create new business when it is in the structur-al hole situation where it is able to con-nect the information offered by these two networks that are loosely linked. If

these two networks are densely linked, most of the members in the networks have access to the information, and thus there are no information gaps as a basis for new business opportunities. The study by Krackhardt (1995) con-firms empirically the above theoreti-cal proposition: In the dense network it is difficult to create new business. It means that a lot of ties are generally good, but when these ties are densely connected to each other, this density could create constraints (for example social norms) that could prohibit new business creation.

If summarized, the best situation for new business creation is when a firm has a number of relationships, which are not closely interrelated. Based on the above presented studies, the number and nature of social ties of firms should be studied carefully when trying to explain new business creation in dynamic and complex situations. Hereafter it is proposed that active and wide social network enhances the pos-sibility of new business creation in dy-namic business situations.

Relational dimension of social networking

By the relational dimension of social relationships is meant the nature of communication between the firms and social ties, i.e., how well the relation-ships are known, how often they are in communication and how important they are to the firm (cf. Tsai and Ghoshal 1998). Kaish and Gilad (1991) found that firms developing new business were not that active in social, interac-tive verbal search. Still, managers were quite eager to talk about their ideas with other people (Kaish and Gilad, 1991). The above could be interpreted

43

so that managers did not search for information by talking with others but searched for evaluations and opinions by discussing with them.

Of the importance of constant communication an example is also the study by Steyaert, Bouwen and Van Looy (1996). They see business oppor-tunities to be created through conver-sational construction of new meaning. Without conversations common un-derstanding cannot be created and the possible importance of the relationship is neglected. Thus, the meaning of the business opportunity develops step by step as a dialogue (see Johannisson 1988). Business opportunities do not exist as such without human aware-ness like “laws of nature” but are created through social construction.

Christensen and Peterson (1990) recognized the importance of informal contacts to new business creation. Fur-thermore, Christensen et al. (1994) pro-pose building networks with long-term relationships to be an effective way of creating and doing business. A long-term network of firms might create competitive advantages, for example through its lighter administration. Hills and Shrader (1998) found that focus-ing on the market and the customers increases the probability of recognizing new business opportunities. Knowing the market and the customers requires purposeful dialogue with them. Finally, Hills and Lumpkin (1997) indicated that the nature of social relationships ex-pands the area in which a firm is able to behave. Without experience and knowledge of certain relationships, such as customers, researchers, suppli-ers and/or investors, it would be almost impossible to establish a new business in the industry you do not know.

These above results indicate that the nature of the relationships, which could be informal, long-term, cus-tomer based, advisory etc., affect new business creation. Especially true this is when the business environment is dynamic. In the dynamic business envi-ronment information, activities and ac-tors are dispersed all over the markets. Thus, the knowledge on the new busi-ness opportunities is extremely difficult to obtain by using traditional business logics. To a firm to be able to discover new business opportunities and ex-ploit new business it must be active in social networking and have that kind of conversational structures that sup-port informal flow of embedded tacit knowledge. Hereafter it is proposed that informal social dialogue enhances new business creation in dynamic busi-ness situations.

Cognitive dimension of social networking

In this study the cognitive dimension refers to the extent of emotional com-mitment of the parties to the relation-ship, i.e., trusting each other, under-standing and supporting each other, believing the other will not let you down and accepting the goals of each other. Johannisson (1988) claims new business creation to be a result of suc-cessful development and maintenance of personal networks. He sees that net-works are organizing contexts that help managers together with other people in the network to understand the busi-ness situation. Without other people managers are seen to be unable to give meaning to influential issues. In inter-action with other people a situation is created which makes it possible to do business. Thus, the network is the vehi-

cle by which the fragmented present reality is enacted to make possible a future reality.

Johannisson’s (1988) idea could be interpreted so that the creation of a meaning – a new business – is not only a cognitive process, which is tak-ing place in a manager’s mind, but it is a social cognitive process that is real-ized through the dialogue of network members. Here it suggested that the network is one of the main resources in new business creation. Only through it can a firm obtain the needed re-sources, legitimate the venture in the market, maintain the motivation as the network gives mental and social sup-port and find new opportunities as the network creates possibilities to exist-ing firms of intensifying the acts of the whole network.

With respect to the emotional commitment, Krackhardt’s (1995) study shows how emotionally too dense net-works can sometimes interfere with new business creation by too strict norms, rules and objectives. However, it shows also how cognitively con-nected relationships need to have access to a wider network of informa-tion. It is proposed here that without trusting relationships individuals are not willing to share their knowledge. Manimala (1992) found, when study-ing the business opportunities and behaviour of high- and low-innovative firms, that high-innovative firms were more people oriented. They were sharing their ideas more readily and thought that the venture “belonged” to the other people as well and not only to themselves. Low-innovative firms were, instead, thinking that the business opportunity and the organi-zation were created in the first place

44

to gain money for themselves, and only for themselves. Thus, more innovative firms created their business opportu-nities together with their network and also showed appreciation of the suc-cess to this network. Low innovative entrepreneurs wanted to keep the ide-as and gains to themselves. This shows how cognitive commitment can affect new business creation. This is support-ed by the study by Steyaert et al. (1996), which showed how trusting each other in conversations created the ground for building new meanings, i.e., business opportunities.

The studies by Hills (1995), de Koning and Muzyka (1996) and Singh et al. (1999), among others, have indi-cated that social dialogue is enhanced by the amount of prior social dialogue, in other words, by how used the firms are to social dialogue. This is wanted to point out in this study as well, since the extent of social interaction and emotionally close relations enhance the collective action of new business creation. This is also in line with the re-sults reached by Burt (1992). It could also be underlined that decision-making concerning what is impor-tant information, what is happening in the industry and what will happen requires from the relationships trust in each other and strong commit-ment. Thus, to those firms who want to act collectively, emotionally strong relationships are valuable. Without willingness to trust each other the in-formation needed for new business is simply not available – it is shared with some other parties. Hereafter it is pro-posed that cognitively committed and trust-based social dialogue enhances new business creation in dynamic business situations.

Empirical results: Network action in the development of new business under dynamic circumstances

A success factor is the firm’s skills to con-vince the social context that the use of resources in the new venture benefits the whole social context.

The seminal articles, like those by Johannisson (1984), Birley (1985) and Aldrich and Zimmer (1986) proposed that new businesses are created by social interaction. On the basis of the analysis of the data, it could be argued alike and put forth new business cre-ation to be about discussing the needs of the social context so that it initiates businesses that satisfies the needs of the social context. High-tech new businesses are created so that they are socially constructed and needed (see Calia et al., 2006) due to the se-vere industrial dynamism. The whole new business development points out the importance of understanding new business creation as a multi-level and multi-actor phenomenon. A single company, no matter how big and im-portant, can not rule and govern the development of the industry.

” … No, tuolla on vaihtoehtoja. Et niinku siellähan Facebook, siellä on MyS-pace, siellä on Googlen... tää... mikäs sen nimi nyt on... Friend Connect, vai mikä se on, joku vastaava, missä on sitten taas useempii muita toimijoita. Mä en tie-dä, mikä näistä tulee olemaan meille se oleellinen ja se, että tuleeks se olemaan mikään, vai tuoko se oman teknologian sieltä, vai tuoko se vaan ne kaveriyhtey-det. Mutta, tota, ainakin tällä hetkellä Facebook on se ehdottomasti tärkein ja suurin.”

Collaborative learning to legitimate the use of resources

Second, the analysis of the data re-vealed that the establishment of new

As Johannisson, Alexandersson, No-wicki and Senneseth (1994) have stat-ed, firms able to create new business are rather organizers controlling social dependencies than anarchists needing individual independence. An individual firm is not an ”island” but firms behave as systems of communities (Larson and Starr, 1993). The data overwhelmingly show how the behaviour focusing on new business creation is more embed-ded and established in the social con-texts than achieved by independent behaviour of an individual firm (see Grimaldi and Grandi, 2005).

By analysing the data it was pos-sible to identify a repertoire of firm level managerial action for developing rela-tionships and their use by the manag-ers, which drive the embedded devel-opment of new business creation. Next these managerial actions in order to create new business which were possi-ble locate from the data are presented and interpreted. Table x provides pri-mary data regarding these managerial ways of acting.

Active discussing of the needs of the social network

On the basis of data, the process of new business creation is behaviour, in which is mobilized the social context to sup-port the business opportunity. A firm in this approach is a negotiator, who tries to make a deal with the social context about the use of resources in order to introduce something that would be valuable to the whole social context. The environment is an active discussion partner whose various points of view must be negotiated into a compromise.

45

business is about collaborative learn-ing (cf. Reynolds, 1991; Keeble, Law-son, Smith, Moore and Wilkinson, 1998; Keeble, Lawson, Moore and Wilkinson, 1999), in which a business is created by cooperation with many instances and in which the firm is the driving force that has the capability to legitimate the use of resources in its own new busi-ness. The data pointed out clearly the dynamic nature of the industry. In this dynamism, the so called industry re-ceipt does not work because sudden changes take place constantly, which are extremely difficult, if impossible, to forecast. Instead, firms collaboratively try to learn the mechanisms of dyna-mism.

As a result of learning efforts, an in-novative milieu is developed, in which knowledge, skills and other resources are in interaction. Learning together in the innovative milieu works as social and mental support in the vague new business creation situation (Keeble et al., 1999). The data points out that, if the innovative milieu does not develop, the experiments and mistakes, which are essential in creating new business, are not seen as desirable. Therefore, based on the data analysis, it is argued strongly for the need of collaborative learning in order to be able to discover and exploit new business opportuni-ties for new ventures.

Networking with weak links

A third important result based on the data is the role of weak social links in bringing up new information (Granovetter, 1973; Burt, 1992). It has been seen that well known relation-ships do not bring much new infor-mation based on which something new could be created. In the network

in which the parties know each other well, there is not new information, and also little by little the unifying social norms and opinions start to hinder pre-senting new ideas and developing new businesses. Therefore, the relations to weak ties, friends of friends and peo-ple you meet every now and then and who do not belong to your immediate social network, can bring that kind of new information that is needed in new business creation. The data illustrates how regionally and industrially closed network of firms are unable to escape their history and culture and create new business. Thus, based on the data, the outsiders, the weak links, bring the new ideas, information and inspiration for new business creation.

Burt (1992) has noticed that the best things are done and innovated by firms which locate in the network so that they are the only link between two or more networks. Thus, such a firm has access to information of all these net-works while the others know only their own network’s information. A wide social network serves as the route to information gathering, the ground for idea evaluation, a resource base and a learning context. Based on the data, a wide social network has an important role in new business creation because the knowledge is widely spread all over the wide network of different or-ganizations and individuals. The social network of actors is arguably alike and local and thus the knowledge base is often too homogenous for new busi-ness creation. Weak links obviously push the network of firms to question the viability and ingredients of their business. Thus, it is argued here that weak links are essential in the evolution and renewal of the whole industry.

”Tos tietty vaikuttaa tosin sekin, et niinku ihan aluks todettiin, niin konver-genssikin on yksittäiseen käyttäjään, ja hänen tapaan kokea palvelut, käyttää palveluita, liittyvä asia, niin silloin tie-tysti, niinku, radikaalia liikettä ei voi ta-pahtuakaan, kun ollaan tän sosiaalisen puolen takia... Suuri määrä ihmisiä, jot-ka kuitenkin toimii sitten yksilöinä, niin pitää saada mukaan, että, tota, mitään tapahtuu.”

” … Facebook – sitä ei pidä nähdä vaan silleen vaan niinku portaalina, kos-ka Facebook pitää nähdä nimenomaan tietopankkina, missä on ne kontaktit muihin käyttäjiin, eli silloin kun se yks käyttäjä tulee meidän palveluun, me nähdään sen muut kontaktit. Me näh-dään niistä muista kontakteista, miten paljon niistä on meidän asiakas [epäsel-vää], ja... Toi on yks tuo tietopankkinä-kemys, tai -näkökulma, ja toinen on se, että se on kanava levittää tietoa, nimen-omaan siihen verkostoon. Eli siinä pitää oikeastaan ajattelun muuttua siitä, että se ei oo vaan enää yhtä, vaikka webbi-siteja, webbiportaaleja, vaan se on oike-astaan, niinkuin, muodostuu ihmisten ympärille.”

Relationship-building based on trust and reciprocity

Fourth, the data indicates that suc-cess in new business creation requires trustworthy and reciprocal relation-ships (Nahapiet and Ghoshal, 1998; Oliver and Liebeskind, 1998; Floyd and Woolridge, 1999). New business creation is not only about choosing the most efficient option possible but merely about the creation of trust-worthy and reciprocal relationships, in which parties want to invest in the long-term development of the new business.

46

It has been seen that in the busi-ness creation, the development of the needed actions is about creating a social contract (Starr and MacMillan, 1990; Taylor, 1999). It requires relation-ships that are based on trust and reci-procity. If the social network is not able to build trustworthy and reciprocal re-lationships, the new innovations are ex-tremely difficult to transform into new business. Based on the data, it is argued that as the industry is dynamic and the development thus difficult to forecast and interpret, it is needed trustworthy and reciprocal relationships to make understandable the vague and frag-mented information. Also, as new busi-ness creation needs often the involve-ment of many firms, the trustworthy and reciprocal relationships are used as a ground for common value adding behavior.

Common sense-making through interaction

Fifth, the data revealed that new busi-ness creation is achieved by continu-ous incremental learning, in which learning takes place by creation of common understanding through interaction (Sarasvathy, 2001). Thus, social systems are not that much of decision-makers than sense-makers (Weick, 1979). It should be stressed that this sense-making is not an in-dividual cognitive process but devel-oped by using social interaction, dis-cussions and enactment of common worlds of meanings.

This behaviour is meaning-build-ing and reality-construction and not decision-making under the circum-stances. The data showed that manag-ers use quite a lot of time in making sense of the situation. Thus, there are

not solutions that could be deduced by logical reasoning but they must be so-cially constructed together with others in that social situation in which those individuals live within.

Based on the data it could be proposed that if the actors lack un-derstanding of learning in dynamic environments and rather avoid than appreciate the importance of making mistakes in order to learn, it is very arguable if they are able to create new business. Here it is argued for, based on the analysis of the data, that firms need continuous incremental learning in order to collectively sense made the situation. In these incremental sense making situations managers create the grounds for new business by col-lectively discussing about possible new business opportunities and how those could exploited by new ven-tures.

” … Mut näis kaikiss on oikeestaan sit ehkä yhtenevää se, et taas tommonen paradigma – samalla tavalla kuin aikai-semmin todettu tää kilpailun lisäänty-minen ja liiketoimintamahdollisuuksien lisääntyminen samanaikasesti. Niin, muiden yritysten kannalta sit saman-aikasesti palveluiden määrä, ylipäänsä vaihtoehtojen määrä kasvaa, mut sitten vastaavasti enemmän osaamista tarvi-taan niiden käyttöön ja valintaan ja ope-rointiin…”

” … Ja se johtuu siitä, että käyttäjät – jos aatellaan sellainen normaaliketju, että käyttäjä löytää tuotteen jos sen... tuotteen käyttöönottoon liittyy se askel, että mun pitää ladata se tuote koneelle ja käynnistää se, ja sen jälkeen vasta mä pääsen käyttään sitä, niin, sillä tavalla ta-voitetaan vähemmän asiakkaita kuin jos ei tarvi ladata mitään tai se lataaminen

on automaattista. Niin, kyllä niitä tullaan käyttämään, niinkuin, käyttämään suo-raan online-ympäristössä.”

Discussion

New business creation could be sug-gested to be the ultimate task of knowledge-based companies in the post-modern, digital economy (Chris-tensen and Raynor, 2003; McGahan and Silverman, 2001). This constant renewal process takes place in the highly turbulent and dynamic busi-ness environment in which predicting based on earlier experiences is almost impossible (Sarasvathy, 2001). In this type of dynamic or even chaotic envi-ronment, economy as a whole devel-ops through experimentally organized business programs, i.e. new ventures or businesses (Eliasson, Johansson and Taymaz, 2004).

This experimentally organized economy builds upon network based competence blocks, which central economic actors are entrepreneurial firms, innovators, financiers, indus-trialists and customers (Carlsson and Eliasson, 2003). Network based com-petence blocks are the social units creating and proposing for markets new businesses. In this process entre-preneurial firms take the most central role by recognizing the prominent new innovations developed by the technology system, discovering cus-tomer needs in markets, organizing re-sources and finance and finally trans-ferring the created new businesses to larger industrialist systems. This study suggests that the above-presented attempt (the GIGA programme) is im-portant to analyze in order to enhance our knowledge concerning multi-level and multi-actor perspective on

47

high-tech new business creation (Bar-on and Hannan, 2002; Downing, 2005; Groen, 2005).

Widely entrepreneurial behaviour of firms is defined to be business op-portunity discovery and exploitation of new business (e.g. Shane, 2003). In line with this, the present study sees this to take place as a process of creat-ing business ventures, in which a busi-ness opportunity is discovered and then turned into a form in which it creates economic value by using own and others’ resources and personal relations (Christensen, Madsen and Peterson, 1994). However, high-tech new business creation in the knowl-edge-based and dynamic economy comes into existence more collective-ly, i.e. in network based competence blocks, than we have thought (Buesa, Heijs, Martínez Pellitero and Baumert, 2006; Eckardt and Shane, 2003). Ma-jor reason for this is that technology systems are the drivers of new inno-vations (van Eijnatten, 2004; Groen, 2005) and that entrepreneurial firms as economic agents then socially construct, i.e. enact (Weick, 1979), new meanings in the form of ven-tures. Important in understanding the dynamic knowledge based busi-ness is that entrepreneurial firms are central and that innovators are sec-ondary. But, however, we should also acknowledge that entrepreneurial firms have meaningful economic role only if there is an active interaction be-tween all economic agents. Thus, new business creation takes place much more in interactive sense-making ac-tion than in firm level decision making based on data analyses.

New business creation is an in-teractive process of many economic

actors and they all have an important role in value creation although en-trepreneurial firms are in central role in transferring innovations into new business (Calia, Guerrini and Mour-ac, 2006; Sarason, Dean and Dillard, 2006). Still, without interaction with the other economic actors, entrepre-neurial firms would not be able create new business ventures. Present study proposes that the economic actors (entrepreneurs, innovators, financiers, industrialists and customers) use dif-ferent roles and behaviours in a dis-cursive and negotiative manner trying collectively to organize the fragment-ed situation and allocating the inno-vations, resources and competences according to possible new business ventures (Eliasson, 2005).

On the basis of the above pre-sented, new business creation is a process where the mental creation and surroundings of the managers of firms are in continuous interaction with each other (Ulhøi, 2005). Inside this “entrepreneurial space” something is happening that is absorbing influences from the present business activities and that is causing chaos and irregular-ity as a result. This study proposes that the above-presented process of new business creation takes place in a net-work and that we should understand the dynamisms of networking behav-iour in order to understand high-tech new business creation.

On these grounds, there exist many knowledge anomalies in the network: much amount of knowledge is available, but there is simultaneously a great number of firms who are not aware of that knowledge. This creates business opportunities to those, who can analyze, understand and integrate

knowledge in a creative way. But, this is possible only if there are broad enough networks, in which the newest knowledge concerning new branches and things reaches the firm. Moreover, these networks need to be familiar and confidential enough that they can be used to ponder complex knowledge and future images together. The new-est knowledge, opinions concerning many types of issues, comments re-garding thoughts and ideas and sup-port for our activities come from these networks. Through these networks, business opportunities are exploited as well.

Summing up, the continuous change in the business environment creates niches for business opportu-nities, which can be understood as the frames to create new businesses. Hence, this sort of strategic change through business opportunities is con-sisting of:1. Strategically flexible ability and cre-

ation of new businesses.2. Need for social as well as virtual net-

works.3. Focus on the core competence

which activates networks.4. Dynamism of business environ-

ment makes it possible to create new business.

5. Value creation by finding constantly new ways to create value.

6. Broad network of actors, which as a whole understands the value crea-tion for customers.

7. Strategic construction of this net-work of actors in order to work to-wards a commonly accepted direc-tion in a value creation.

8. The image seeing the company as a strategic part of a value creating network.

48

Resource analysis

The resource-based view

The traditional resource-based ap-proach to business emphasizes the role of distinctive competencies as a basis for sustainable competitive advantage of the firm (Barney 1991, Miller & Sham-sie 1996, Peteraf 1993; Roth 1995; Peng 2001). Heterogeneity of firms and their resource endowments, leads to differ-ent strategies and performance, due to differences in resource deployment, business activities, and learning capa-bilities. Similarly, heterogeneity is one of the reasons why the flexible, idiosyn-cratic attributes of the firm play such an important role in the development of its activities and performance (Dierickx & Cool 1989; Peteraf 1993). Resources that are distinctive or superior to rivals’ resources may become the basis for (sustainable) competitive advantage and action. However, in order to serve as potential sources of sustainable com-petitive advantage, the firm’s resources must meet four requirements. As Bar-ney (1991: 105-106) writes, “To have this potential (of sustained competitive advantage) a firm resource must have four attributes: a) it must be valuable, in the sense that it exploits opportunities and/or neutralizes threats in the firm’s environment, b) it must be rare among a firm’s current and potential competi-tion, c) it must be imperfectly imitable, and d) there cannot be strategically equivalent substitutes for this resource that are valuable but neither rare or im-perfectly imitable...” Thus, firm-specific resources are “strategic” or “critical,” as opposed to the undifferentiated inputs of the traditional input-output flow of organizational transformation proc-esses. In other words, critical resource

stocks are those that are non-tradeable (Barney 1986), non-imitable, and non-substitutable (Dierickx & Cool 1989). All other resource stocks can be consid-ered tradeable (Chi 1994). Tradeable re-sources can be used as basis for action, but not as basis for advantage.

By definition, distinctive compe-tencies need to be controllable and thus internal to the firm. Dierickx & Cool (1989: 1506) argue that the accumula-tion of strategic resource stocks has to occur under conditions of centralized control, since strategic stocks are accu-mulated by “choosing appropriate time paths of (different potential) flows over a period of time.” This implies that while flows can be adjusted instantaneously, stocks cannot. An individual firm can be seen as the combination of accumu-lated tangible and intangible resource stocks that are unique to the firm. These stocks, in turn, can be described as in-ternal attributes of the firm, including assets, capabilities, processes, routines, and knowledge, that are tied semiper-manently to the firm or controlled by it (Wernerfelt 1984, 1989; Barney 1986, 1991; Dierickx & Cool 1989; Roth 1995).

Partly parallel to the traditional RBV approach, the dynamic resource-based view has its origins in Teece, Pisano &

Shuen’s (1997) definition of dynamic capabilities that involve adaptation and change through building, inte-grating, and reconfiguring resources. In dynamic environments the RBV has been used to explore why certain firms seem to have competitive advantages in situations of rapid and unpredictable changes (Eisenhardt & Martin, 2000). Dynamic capabilities can be character-ized as simple, experiential, and unsta-ble processes that rely on quickly creat-ed knowledge and iterative execution, and the outcomes of the processes are adaptive and unpredictable. However, if we are to capture and understand temporary competitive advantages, the traditional RBV thinking [that rare, valuable, non-imitable and non-substi-tutable resources contribute to sustain-ability] cannot just be turned around. Eisenhardt & Martin (2000) challenged the traditional resource-based view on competitive advantage by dynamism point of view by claiming that compet-itive advantage arises from valuable, somewhat rare, equifinal, substitutable, and fungible dynamic capabilities (re-sources). Dynamic capabilities involve the creation of new, situation-specific knowledge by engagement in experi-ential, learning-by-doing actions.

Figure 6. The traditional resource-based view of resource attributes contributing to competitive advantage.

Valuable

Non-imitable

Rare

Non-substitutable

Sustainability ofCompetitiveadvantage

49

The dynamic capabilities or dy-namic resource-based view approaches build on two perspectives of change: 1) market dynamism and 2) evolution of resources, whether internal or ex-ternal to the firm (Oliver, 1997; Eisen-hardt & Martin, 2000; Helfat & Peteraf 2003; Schreyögg & Kliesch-Eberl 2007; Pacheco-Almeida, Henderson & Cool, 2008). The discussion on market dyna-mism within the dynamic capabilities approach of the RBV can be summarized by stating that the higher the dynamism of the market, the more unpredictable, volatile, and temporary the competitive advantages become. From the competi-tive advantage point of view some no-tions concerning dynamic capabilities (Schreyögg & Kliesch-Eberl, 2007) even suggest that capabilities may become obsolete as strategic resources in highly dynamic markets.

The discussion on the evolution of resources has looked upon capability life cycles (CLC). Helfat & Peteraf (2003) defined three original stages in the ca-pability life-cycle: founding, develop-ment, and maturity. But, the branching of capabilities emerging during the life-cycle is often more interesting. Af-ter a selection event the capabilities may become retired (dead), retrenched (gradually declined), renewed (im-proved), replicated (in a different mar-ket), redeployed (in a different product-market), or recombined (with another capability). In addition, Pacheco-De-Almeida, Henderson & Cool (2008) discuss resource accumulation lags that they define as the average time a firm takes to accumulate the resources to produce one unit of output in a product-market of interest. If seen from the CLC point of view, this lag starts af-ter the point of selection and ends as

the resource contributes to the com-petitive advantage and activities of the firm. Again, assuming these notions of resource evolution, it might be argued that as resources evolve their hetero-geneity increases and the competitive advantages based on them become more unpredictable, volatile, and tem-porary. Sustainable competitive advan-tages, in turn, can be argued to emerge as the effects of market dynamism and resource evolution decrease or their determinants loose relevance in com-petitive situations.

Indicative results of the resource-based analysis

Seen from the resource-based and dynamic resource-based perspec-tive, the heterogeneity of resources and resource development trends among the ICT companies appears to be a fact. However, the trends of the industry and the development activi-ties initiated or emerging among the interviewed companies does not seem to reflect the ideas advocated by the resource-based perspective. The trends are seen to appear as a rather unified way and their effects are seen in a simi-lar light in all of the sub-sectors of the ICT industry. At the same time, distinc-tive resources at the company level are hard to find. Resources that could be used as a basis for creating competitive advantages appear to be astonishingly vague and unclear for the interviewed informants. Valuable, rare, inimitable or non-substitutable resources are not a conception that could be identified easily from the interviews. Indeed, con-vergence seems to have resulted in de-creased heterogeneity within the dif-ferent sectors of the ICT industry. And, should this be true, decreased hetero-

geneity should also have narrowed the spectrum of possible business models within the industry.

One of the strategic key assump-tions held within the ICT sector has been the strong push of the mobile technologies. However, one of the consequences of convergence has been the fact the internet technolo-gies have taken a stronger role in the development of the industry than the mobile technologies. It has been dif-ficult for the companies to adapt to this new situation, and a great deal of the uncertainty encountered by the companies can be explained by the emerging role of the internet technolo-gies. It can be said that one of the most fundamental challenges the ICT sector in Finland is facing is to speed up the process of understanding the role of internet technologies and their related business models and value creation mechanisms – not to mention the re-quired new cooperation and customer relationships and positions.

The basic technical know-how within the ICT sector was seen as the key resource of the past, but the role of this kind of resources or competences in the future was debated with a con-cern. This concern originated from the consequences of convergence, a situ-ation where bigger players controlling customers dictate future development activities related to technology devel-opment, the old core of the Finnish companies. Also, the decreasing num-ber of new and inconsistent technol-ogy platforms was seen to narrow the role of technological resources as such. Rather, the new thinking and resources that were seen to be the key in the fu-ture should be found from within the trends coming from consumer side of

50

the ICT sectors. As a result, a wider spec-trum of (combined or recombined) re-sources, competences, and skills were seen to be needed in the future.

Example data picked from the resource perspective:

”että jos täällä on tällaisia isoja toi-mijoita integraattoreina, niin kuin me, me puhutaan kymmenen vuoden päästä prosesseista, prosessien mallintamises-ta, bisnestarpeen haltuun ottamisesta prosessien kautta. Tämähän on meille jo tuttua tarinaa sieltä kahdentoista vuo-den takaa, mutta hiljalleen nyt myös ar-kipäivää. ”

”… että jos lähdetän henkilöstä niin että … osaamisen muoto muut-tuu jonkin verran… pienillä firmoilla on tämmöistä osaamista, että ne keskittyy vaan yhteen tiettyyn teknologiaan tai komponenttiin, tai jopa niinku tällaiseen tuotteeseen…jos puhutaan erityisosaa-misalueista, jotka on sitten toisaalta niche-alueita, että niitä alueita ostavia asiakkaita esimerkiksi paikallisissa palve-luissa niin kauheen paljon ole…”

”Joo, tää trendi mitä me itse voimak-kaasti edistetään, niin kuin äsken sanoin, niin vahvistaa sitä liiketoimintaprosessi-en ymmärrykseen liittyvää osaamista, sii-hen liittyvää määrittelyosaamista, ja tota sen rajapinnan, mikä se teknologiaan liit-tyy siihen kohtaan, sen merkitys kasvaa.”

” …kyl mä edelleen nään tulevai-suutta tän niinku meidän kyvyllä inno-voida, tuottaa uusia teknisiä ratkaisuja. Ei ehkä sellaista niinku perustavaa laatua, Nobel-tason tutkimusta, mutta kyky sit-ten koostaa erilaisia ratkaisuja, palveluita yhteen, viedä niitä eteenpäin, niin se vois hyvinkin löytyä siltä puolelta se meidän teknisen kyvykkyyden helmet jatkossa ja

se, mikä siihen liittyy on tämmöinen ter-vetullut uus ilmiö tässä nyt markkinoille tulleissa sukupolvissa, tämmöinen ihan niinku häpeilemätön kaupallistaminen, ja tota niinku myyminen, asioiden myy-minen, niin siihen on tullut ihan eri lailla draivia.”

”… se vaatii vähän eri tyyppistä osaamista kuin, mitä me ollaan aikai-semmin tarvittu, eli me tarvitaan enem-män osaamista verkkopuolelle, tarvitaan osaamista siitä niinku asiakkuuden ym-märtämisestä. Eli just se kun me ei aikai-semmin olla oltu suoraan yhteydessä asi-akkaaseen, niin nyt me ollaan. Niin meillä pitää olla osaamista niinku optimoida se käyttäjäkokemus. Ja tuota, pitää olla tietty osaaminen luoda mielenkiintoista sisältöä. Siinä muuttuu niin moni asia…”

”… siis tuoteperheet laajenee, ja tu-lee hyvin paljon erilaisia tuotteita, niin se osaaminen pitää olla niinku laveam-paa… mitä tehdään… ja siihen, miten se tarve määritellään, elikkä niinku tää perus… tällainen tuota vaatimusmää-rittely-analyysi, toteutus, prosessi, osaa-minen… ihan yleisprosessiosaaminen ja tekemisen osaaminen, että et sä voi ennustaa, että mitkä ne on ne tuotteet, jotka menestyy viiden vuoden päästä…”

”ja toisaalta tää hajautettu tuote-kehitys on erittäin vaikeaa. Me pyritään siihen, että meillä on lokaatioissa end-to-end responsibility jostain alustasta tai tuotteesta.”

”… tosi iso menestys, niinku tän tek-nologiainnovaatioiden kehittämisessä, mutta tosiaan kaikella on aikansa ja nyt ollaan täällä palveluinnovaatiopuolel-la…”

”… esimerkiksi juuri tään liiketoimin-nan sähköistämiseen ja digitaalisten pro-sessien viemistä tosi syvälle…”

”… mutta että kyl meillä varmaan näissä sekä yritys- että kuluttajien käyt-täytymisen prosesseissa varmaan olisi hyödynnettävää, ja voi olla, että me ei varmaan sitäkään pystytä yksin teke-mään…”

”suuri etu kontentin luojille… kun siinä on se konteksti mukana… monessa muussakin paikassa törmänny, että pu-hutaan siitä, että behavioraalisen oli sen datan, niinku hyötykäytöstä…”

”Kontrollipisteet on ne toimijat, joilla on tieto siitä ketä ne on ja tieto siitä mitä ne ihmiset tekee, elikkä on olemassa täm-möiset käyttäjätiedot… ne voi kontrolloi-da, myydä, hallinnoida…”

”Niin, siis tää liiketoiminta on men-nyt niin kovaa eteenpäin, tuotteita, sisäl-töä kehitetty. Ei oo niinku ymmärtämystä mitä on tuotehallinta. Ja mitä on tuote-prosessointi ja myyntiprosessi. Nää kaikki, ne on niinku ihan uutta… tota se tuot-teistaminen on pienissä yhtiöissä aina ongelma.”

The comments picked from the data highlight one fundamental change in resources, the need for understand-ing resources as processes rather than stocks that have been accumulated. As a result, the idea that business environ-ment consists of networks and it can be seen as an ecosystem, where value crea-tion and positioning takes place through partnerships, is accepted by many of the interviewed informants. Thus, un-derstanding of customers’ needs and experience and related customer proc-esses, ability to manage, productize and tailor product and service offering, and understanding content development in differing contexts are seen as the key resources of the future.

51

Part  4Conclusions

Introduction

The purpose of this chapter is to answer to the questions set forth for the re-search and draw the conclusions relat-ed to the questions, Also, the purpose of this chapter is to assess the quality, reliability and validity of the research, the answers given, and the conclusions drawn. The semi-structure frame uti-lized in the interviews consisted of the following themes: background of the interviewed, convergence and its con-sequences, business models and the business environment, resources and competences. The original research questions presented in the first chapter of the report were as follows:1. What could be the core elements

and perspectives that could be used to capture and explain change with the ICT companies?b. In order to answer the above

question, what kind of tools, per-spectives and theories we can use to explain and understand the ICT sector and the compa-nies in it?

2. What are currently the most impor-tant drivers of change if the change scenarios developed by the GIGA work groups are used as a starting point for research?c. In order to answer the above

question, what kind of conse-quences the identified drivers

and scenarios have on the com-panies, their business models and value networks?

3. What are the extreme scenarios for ICT companies in practice and how we can identify their consequences for companies?d. And finally, in order to answer

the above question, what kind of business models and value networks could help companies succeed in their particular busi-nesses?

The first research question regarding the core elements and perspectives was formulated in order to identify a functioning approach to business mod-els and select approaches by which changes within the ICT sector can be captured and explained. The selected research themes and discussion topics were used to open up the elements of business models as understood by the interviewed. The data indicates that all of the interviewed informants under-stood the concept of business model differently, depending on the specific industry sector they represented and the models from which they had ear-lier experience. However, it can be stated that the selected approach made it possible to reveal the different elements of the business employed by the ICT companies in a consistent and profound manner. Considering the se-

lected theoretical perspectives – indus-try, ecosystem, network, and resources – it can be stated that these theories have widely been used to research the ICT sector also in prior research and that the ideology that these theories represent make it possible to research businesses in a coherent and holistic manner. It was found out also in this research that the use of the theories added value to data analysis and result generation processes by providing a functioning frame of reference for the analysis.

As regards to the second and third research questions related to the driv-ers of change and scenarios of business employed within the ICT sector, the se-lected approach and the data collected during the research showed that the companies within the ICT sector are concerned of the business drivers and are rather well aware of the general trends in the industry. In addition, the interviewed informants were rather well aware of the scenarios and related terminology of verticals and horizon-tals, indicating that these two catego-rizations added value to their thinking of the business environment and po-tentially usable and working business models. To rank the importance of the drivers is, however, a challenging tasks as the rankings vary from company to company and from one business model to another. However, a certain

52

clustering of these drivers emerged from the data, indicating that certain drivers were of greater importance than others when the companies were looking at the anticipated or feared consequences of their future business opportunities and challenges. Thus, it was assessed that the results of the re-search fulfill the basic requirements for quality, validity and reliability.

At the closing part of the data col-lection, based on the interview results, we presented a preset powerpoint slide set to two panels consisting of ICT professionals, managers, and entrepre-neurs. In the panel discussions the pur-pose of the discussion was to deepen, clarify and test the validity of the con-clusions drawn from the interviews and third party information. The pres-entation set that was used as a primer for discussion is attached as an appen-dix to this report. The most important change drivers can be grouped as fol-lows: 1) change in the media landscape and social media and 2) cloud com-puting and convergence. It appears evident that for consumers the media landscape is diverging rapidly through new sources, channels and types and roles of information, resulting in atten-tion divergence. Social media and its changing role is, accordingly, leading the change in consumer behavior. Me-dia landscape and social media have also several parallels with technological convergence – as well as with techno-logical divergence. Also, if the commu-nication networks are seen to be con-verging, devices and industries seem to be diverging. The new cloud comput-ing is the wild card in this development as it seems to be changing the rules of the ICT related businesses through new business modes, such as free data,

SaaS, and open source. New entrants from internet or consumer business to the mobile related businesses ap-parently create distress among the es-tablished mobile focused companies. A good example in this respect is Ap-ple; it has succeeded in changing the behavior and rules of the whole mobile industry. In the following these drivers and their consequences shall be dis-cussed in a more detailed way.

The trends themselves

homma miettimään monella tasolla uudestaan, elikkä ne uudet tavallaan kanavat ja menetelmät, tarkoittaa ensin-näkin sen sisällön, sen täytyy olla siihen sovitettua. Sitten sen sisällön käyttötavat muuttuvat, elikkä kuluttajat kuluttaa eri lailla ku ne istuu kotisohvalla versus ku jos ne istuu, on liikenteessä, ja sit tosiaan se, että se vaikuttaa siihen mainontaan, eli se muutos on moninkertainen ja moni-tahoinen, ja se on isompi, koska ymmär-retty ja vasta nyt ole alettu näkee, että... esim. tuolla Jenkkilässä katsoin, että esimerkiksi tällainen sosiaalisen median käyttö, että mietitty, että jos katsotaan kuka sillä tekee bisnestä, niin itse asiassa se ei olekaan se bisneksen tekemisen, se ei oo se väline, vaan se on se väline saada se intressiryhmä. Siellä on jo nyt näkyvissä, että tulee saitteja, jotka kerää tietyn int-ressiryhmän, tietyistä asioista kiinnostu-neet ihmiset samaan paikkaan. Ja se so-siaalinen media on vaan keino tehdä se, että ennen ku sä paat sinne 237 Harley-Davidson videota samaan paikkaan, niin arvatkaa ketä sinne tulee? Ihmisiä, jotka on kiinnostuneita Harley-Davidsonista, ja niin se vaan toimii, että tavallaan se ei oo se rahantekokoneista, vaan sen ympärille on rakennettu se rahantekokoneisto, ja se on yks osa sitä, mikä on selkeesti muut-tumassa ja ollaan oppimassa hiljalleen. Mut sit se on se vaikeus, että ne käyttö-tavat muuttuu entistä nopeammin, että konsepti, joka on luotu tänä vuonna ja toimii Q2 oikein hyvin, niin se ei oo enää ihan varma Q3:lla, että toimiiko hyvin, että se on semmonen jatkuva muutoksen tila, että sieltä löytyy se.”

It is also widely accepted among prac-titioners and academics that IP con-vergence is shaping media landscape and affecting profoundly on the me-dia production and consumption. This

Media landscape and its connection with convergence

From business perspective, we are un-dergoing one of the greatest media transformations in history. This trans-formation will gradually result in a situation where the media landscape of today and tomorrow is drastically different – media is evolving and the introduction of broadband, IPTV and digital radio means that consumers are now able to view content, information or entertainment wherever they are across a wide variety of devices. The wide variety of platforms and mobile access to content available to consum-ers at present means that media and people are becoming connected – converging distribution networks and devices are reshaping how consumers create, describe, find, share, and remix media content, and to connect to each other in ways that have not been avail-able never before (see e.g. Microsoft: Europe Logs on, 2009).

About the change of media landscape:

”Se oli itse asiassa sellainen, jota ei mun mielestä oikeen hyvin oo nähnyt edes mediateollisuus… kyseessä ei ole vain jakelukanavan muutos… vaan koko

53

phenomenon is very well illustrated by Sami Salmenkivi (2007): The above dis-cussion entails the following elements:

1. Industry convergence. 2. Divergent industries, including me-

dia, ITC, telecom and entertainment are converging. Mergers and acqui-sitions are emerging across the tra-ditional industry boundaries.a. Media divergence.b. The number of content and

channels in television, Internet and magazines, etc. is growing very fast. This has inevitably re-sulted in a situation where mar-keters face challenges of media clutter also in online media.

3. Network convergence.a. IP convergence is undeniable fact.

4. Device convergence.a. All technologies and applica-

tions are available at every de-vice. Smartphone or any other device includes PC, phone, mu-sic player, camera, etc.

5. Attention divergence.a. Hundreds of different media are

actively followed by TV, PC, Note-book, Hand held device and so on. Thus, people are increasingly facing information overload.

”Jos sitä katsoo ihan teknologian nä-kökulmasta, niin se on ikävää, että kaikki menee IP-pohjaiseksi pitkällä aikavälillä, koska IP on kuitenkin loppujen lopuksi tällainen päästä-päähän -malli ja sitten se johtaa, puhdas IP johtaa siihen, että CNN:stä ladataan samaa tietoa tuhansia ja tuhansia, tai miljoonia ja miljoonia ker-toja, et siinä mielessä tavallaan se tarve, mikä siellä on ja puhdas IP, ne ei oo tekno-logiamielessä kovin hyvin sovi toisiinsa. Tietysti se IP:n tuleminen voidaan näh-dä, et sieltä tulee taloudellisia hyötyjä,

lähinnä sen teknologisen standardoitu-misen myötä ja sitä kautta konvergoi-tumisen myötä. Ja varmasti se lyhyellä tähtäimellä tulee olemaankin näin, mut-ta jos sitten ajatellaan pitkiä syklejä, niin mä kuvittelisin, että pitkässä syklissä, eli puhutaan 30 vuodesta tai jotain sellaista, niin IP on välivaihe, jossa siirrytään jo-honkin, en tiedä mihin HTTP:en.”

”Jolloin johtopäätös on se, että lä-himmät 10 vuotta eletään vaan tässä maailmassa, ja siihen on ikään kuin so-peuduttava.”

”…kyllä oikeestaan kaikki isot suur-yritykset on joutuneet taipumaan sen eestä, että meillä on geneerinen perustek-nologia, joka nyt on IP-pohjaista, että sitä sitten siirretään erilaisten [epäselvää] sun muitten ylitse. En mää nää siinä paljon vaihtoehtoja. Se on kustannuskysymys, ja se on myöskin siinä, että tällaisten standardien voima iskee siellä, mutta se ei tarkoita sitä, että se on pysähtynyttä, että ollaan kaikki vanhassa teknologias-sa kiinni. Nopeudet kasvaa ja kaikki täm-möset, että sitä vaan venytetään vanhaa teknologiaa entistä pitemmälle, mutta kyllä tossa... ei oo vastaväitteitä. Siihen on hankala löytää vastaväitteitä tällä hetkellä.”

IP convergence also affects traditional business models:

”Niin, siihen suuntaan se näyttää nyt menevän jos katsoo, jos ajatellaan, että IP-maailma ikään kuin ensimmäi-senä tuhosi operaattorien perinteisen vuosisataisen ansaintalogiikan, että aika-tapahtuma-pohjaiseen velotukseen liittyvistä malleista, ja taas tuolla medi-apuolella noitten perinteisten medioiden dominanssi oli hyvin stabiili, tavallaan tämä muutamat pääkanavat, ja nyt näyttää siltä vaan, että ihan samanlai-nen liiketoimintamallien, voisko sanoa

perinteisten mallien, tuhoutuminen ta-pahtuu tuolla mediakentässä, että isot toimijat on jo nyt todenneet, että se siirtymä – ja voi olla, että se juuri – itse uskon tähän pitkähäntäistymiseen, että siltä alkaa vaan näyttää, ja kuka sitten, älykkäät toimijat luovat sitten tällaisia uusia mediarakenteita, jotka pystyvät hyödyntämään sitä, että sulla onkin – en mä tiedä onko jotain tällaisia digitaalisia mediatoimistoja tai muita, jotka pystyy hanskaamaan 2000 kanavaa sulle, suo-raa mediakamppanjaa ja muuta, että ei se niinku se maailmankuva heilahtaa, ja ainakin nyt näyttää jos katsoo näiden perinteisten toimijoiden [epäselvää]... Tää musta tää enemmän liittyy bisnes-malleihin, ja bisnesmallit murtuu tässä, ja yritykset nyt kuitenkin toimivat ikään kuin näillä omistaja-arvon* tuottamisra-kenteilla, ja jos bisnesmalli tuhoutuu, niin silloin niinku haasteet on aikamoiset, että joka tapauksessa se murros tulee, mä oli-sin taas vähän veikkaamassa sitä tähän. Ainakin tietyssä vaiheessa, voi olla, että se pitkähäntäistymisen jälkeen syntyy jon-kinlainen tällainen konsolidaatio, ehkä, mutta ei se siltä tällä hetkellä näytä. ”

At present, digital data is one of the most powerful assets of companies. But it also entails one of the biggest question marks of our times: How to monetize the data? It needs unique and sophisticated set of business intel-ligence – skills, technologies, applica-tions and practices to utilize the data.

Digital data is a great opportunity but also a big challenge for market-ers. Digital consumers are increasingly moving from mass broadcast media to social media, making current mar-keting communication processes less effective than before. To adapt to this change, marketers need to use more

54

dynamic marketing strategies that take advantage of two-way communication with consumers. Thus, solutions for analyzing massive amounts of com-munication and transaction data are needed. These provide considerable benefits to both the marketing depart-ment and CRM managers. Analysts can utilize data for selecting the most effec-tive targets, the influencers, in the tar-get audience. CRM managers can use it in improving the results of customer loyalty, customer acquisition and cus-tomer retention.

”Se, joka pystyy tän homman niinku hallitsemaan, ja poimimaan, analysoi-maan sitä tietoa, mikä on käytettävissä ja jolla on lupa lähestyä sitä loppuasiakas-ta, niin se on todella kingi, ja se voi itse asi-assa mun mielestä, tämmönen mainon-nan logiikkaa muuttuu sillä laillakin, että ku nyt sä maksat siitä mainoksesta, että sulla on se mainos, niin mä en usko, että sen jälkeen maksetaan enää mainokses-ta, koska tämmönen toimija voi tehdä diilin, että sä maksat pelkästään niistä suoritteista, ostoksista, saat sieltä sen tie-tyn katteen siitä välistä, ja se riittää sulle sen takia, että sä saat niin kovan pullin aikaseksi, ja se on mainostajalle tosi mie-lenkiintoinen juttu, koska sä et koskaan maksa turhasta.”

”Se on mainostajan näkökulma. Mitä rupesin miettimään, mitä se on se relevanttius, että tuleeko siinä semmo-nen ilmiö, että tavallaan se pirstaloituu liikaa se vastaanottajajoukko? Että voi-daan tarjota aina sille vastaanottajalle se relevanttitieto? Että tavallaan, sitä mä mietin ongelmana, että riittääkö, että mainostajalla on resurssit tarjota ainoas-taan relevanttia tietoa juuri sille henkilölle, juuri sinä oikeana aikana? Totta kai sä voit automatiikalla onnistua jossain määrin,

mutta mä itse näen ongelmaksi sen, että siinä tulee sitä, että se käytännössä kuiten-kin menee siihen, että mainostajalla ei riitä osaaminen siihen, vaan se tuleekin vaan bulkkimainonnaksi, joka ei sitten kosketa.”

Cloud computing is a general term for anything that involves delivering host-ed services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS).

“The rise of the cloud is more than just another platform shift that gets geeks ex-cited. It will undoubtedly transform the IT industry, but it will also profoundly change the way people work and companies oper-ate.” (The Economist, “Let it Rise,” 10/23/08”

A cloud service has three dis-tinct characteristics that differentiate it from traditional hosting. It is sold on demand, it is elastic – a user can have as much or as little of a service as they want at any given time; and the service is fully managed by the provider (the consumer needs nothing but a per-sonal computer and Internet access). Significant innovations in virtualization and distributed computing, as well as improved access to high-speed Inter-net and a weak economy, have acceler-ated interest in cloud computing.

In Finland, fascinating projects are build around cloud computing. One of the most interesting is called Super-matrix (see www.supermatrix.fi). The project aims at bringing 100-megabits and faster connections to homes and desktops, making personal comput-ers obsolete. According to Superma-trix weg page, this is the world’s first project where the operator aims to virtualize users’ computers and will pro-vide the whole desktop as a service.

With connection speeds of a hun-dred megabits and more, all comput-ers including desktops can be located in the operator’s computer room in each town and village. The user only needs a display unit, mouse and key-board. The user’s computer is a virtual part of an extremely powerful com-puter system connected directly to the Internet backbone. Performance of one hundred times or more than is currently available will be possible if necessary. All local applications are di-rectly interconnected. Each Supermatrix locality has its own supercomputer that accommodates next-generation appli-cations for the vincinity. In Supermatrix, backups, hardware maintenance, virus security and operating system updates are taken care of professionally. Users are able to see their own applications and desktops, even if they change the ter-minal device. In mobile and remote use, connection to one’s own desktop can be realised easily and safely. In addition, it is easy for the user to switch operat-ing systems and expand memory.

It seems that cloud computing is chal-lenging existing business models espe-cially in B-to-B markets:

”…niin aika iso osa menestyneistä IT-yrityksiä tänä päivänä, nimiä mainit-sematta, mutta suuria systeemi-inter-graattoreita, mutta niidenhän pääbisnes oikeastaan perustuu tällaiseen projekti-työhön, jolla sovitetaan keskenään so-pimattomia järjestelmiä, ja silloin taval-laan tällainen SOA, avoimen maailman arkkitehtuuri, johon nimenomaan nämä webbipohjaiset palvelut tarjoaa todella tavalla fiksun tavan, niin tullaan näke-mään varmaan tällainen merkittävä tuottavuushyppy, eli tämmönen SaaS, tai palvelut täältä cloudista.”

55

”[Google] …tulee yritysmaailmaan sieltä kuluttajapuolella hankitulla valta-valla kustannustehokkuudella ja täm-möisellä luotettavuudella, ja nyt nämä suunnitelmat, niinku on nähty näitä paprepitehtaita ja laivoihin niinku ja jäähdytykset ja [epäselvää], haetaan viimeinenkin sentti siitä, niin kyllä siinä pienellä pelurilla aika haastavaa ruveta jotain white label emailia vastaan tap-pelemaan. Mä oon huomannut monen yrityksen todenneen, että 1/10 kustan-nuksilla Google tekee sähköpostin mihin tahansa, niinku tällasena white label -tuotteena, vain esimerkkinä niinku vaan siitä. Että tää cloud computing, SaaS tuo niin toisenlaisen maailman, että aika monella isolla pojalla on vitsit vähissä kyllä tässä pelissä. Ja aika isoja tämmösiä proprietor rajapintoihin liittyviä ja tek-nologiaan liittyviä bisneksiä tulee kuo-leen tässä aallossa, tai ainakin voimaan huonosti. Tää on mun henkilökohtainen näkemys, mä oon kans muutaman ker-ran käynyt näitä jenkkipään SaaS [epä-selvää] kuuntelemassa ja seminaareja, ja [epäselvää] B-to-B-to-C-markkina [epä-selvää] B-to-B [epäselvää] markkina.”

However, cloud computing also in-volves security issues.

”Mun on vaikeaa sanoa mitään to-hon lyhyellä tähtäimellä, mutta sitten jos pitkällä tähtäimellä ajatellaan, niin varmaan niinku cloud storage ja siitä tämmöseen informaatiosentriseen [epä-selvää] meneminen on sellainen, joka tu-lee säilymään ja pysymään, mutta niinku cloud computing, siellä on niin isoja tie-toturvaongelmia loppujen lopuksi, että siitä on vaikea sanoa, että mikä niitten painoarvo pitkässä juoksussa tulee ole-maan. Cloud storagessa ei oo sitä kun se kaikki tieto voidaan tarvittaessa krypta-ta* ennen ku se tallennetaan ja silti se on

löydettävissä sieltä, ja jopa rajatussa mie-lessä voidaan tehdä hakuja [epäselvää] olemassa, hyvin rajattuja hakuja verratu-na siihen, mitä voidaan [epäselvää] kui-tenkin. Että sitä on vaikee ennustaa, että mikä luottamuksellisuuden ja tietoturvan ja yksityisyyden merkitys pitkässä juoksus-sa tulee olemaan, mutta ne ainakin toimii vastapainona selvästi sille sovelluksen toi-mintalogiikan pilveen siirtämiselle. ”

Social media

Social media is one of the greatest buz-zwords of our times. In this report social media refers to media designed to be disseminated through social interac-tion, created using highly accessible and scalable publishing techniques. Social media supports the human need for social interaction, using Internet- and web-based technologies to trans-form broadcast media monologues (one-to-many) into social media dia-logues (many-to-many). It enables peo-ple around the globe to contribute and share content, experiences, ideas, and expertise, etc. According to Wikipedia businesses also refer to social media as user-generated content (UGC) or con-sumer-generated media (CGM).

The main characteristic of social media is audience fragmentation: sourc-es (hundreds of millions of blogs, wikis, forums…) as well as tools. The following framework provided by redcavazza.net illustrates the richness and diversity of social media.

The various tools and services displayed on the landscape are listed bellow.1. Expressing tools allow users to ex-

press themselves, discuss and ag-gregate their social life:a. Publicatin tools like blogs (Blog-

ger, Typepad, Wordpress), wikis

(Wikipedia, Wetpaint, Wikia), mi-croblogs (Twitter, Tumblr, Identi-ca), citizen news (Digg, Newsvine, AgoraVox) and livecast (JustinTV, Ustream, BlogTV);

b. Discussion tools like forums (phpBB, Phorum) and video forum (Seesmic), instant messengers (Y! Messenger, Live Messenger, Meebo, eBuddy), comments serv-ices (IntenseDebate, Cocomment, Disqus, BackType) and 3D chats (IMVU, Habbo, WeeWorld, vSide);

c. Aggregation tools (FriendFeed, SocialThing, LifeSteam, Profilac-tic, Plurk…).

2. Sharing tools allow users to publish and share content:a. Content sharing for videos

(YouTube, DailyMotion, Vimeo), pictures (FlickR, SmugMug, Pi-casa, Fotolog), music and playlists (Last.fm, iLike, Deezer), links (Deli-cious, Magnolia, Reddit) and doc-uments (Slideshare, Scrib, Slideo);

b. Product sharing with recommen-dations platforms (Crowdstorm, ThisNext, StyleHive), collaborative feedback platforms (FeedBack 2.0, UserVoice, GetSatisfaction) or swaping platforms (LibraryThing, Shelfari, SwapTree);

c. Place sharing with tools based on local adresses (BrighKite, Loopt, Whrrl, Moximity), on events (Up-coming, Zvents, EventFul, Social-izr) and on trips (TripWolf, TripSay, Driftr, Dopplr).

3. Networking tools allow users to search, connect and interact with each other’s:a. Search networks allowing us-

ers to find ex-classmates (Class-mates, MyYearBook, Alumni) or persons (MyLife);

56

b. Niche networks (Boompa, Dog-ster, PatientsLikeMe, Footbo);

c. BtoB networks (LinkedIn, Plaxo, Xing, Viadeo);

d. Mobile networks (Groovr, Mo-coSpace, ItsMy, Zannel);

e. Tools to build an online network (Ning, KickApps, CrowdVine, Col-lectiveX).

4. Playing services that now integrate strong social features:a. Casual games portals (Pogo,

Cafe, Doof, Kongregate, PlayFirst, PopCap, BigFish, Prizee);

b. Social games portals (Zynga, SGN, ThreeRings, PlayFish, Casu-alCafe, ChallengeGames);

c. MMORPGs (World of Warcraft, EverQuest, Lord of the Rings On-line, EVE Online, Lineage, Dofus, Runescape);

d. MMOs (Drift City, Kart Rider, Maple Story, Audition, Combat Arms, Quake Live);

e. Casual MMOs (Puzzle Pirates, Club Penguin, Neopets, Gaia On-line, SmallWorlds, OurWorld).

This framework helps us to draw a broader picture of social media phe-nomenon. However, the million dollar question remains unanswered: How to monetize social media. During the last few years, people have “learned” that content in the Internet is free. However, there is fundamental problem: “The dig-ital revolution has opened many new and inexpensive distribution channels but it has not made content free.” Broad-ly speaking, in digital media, there are a great number of business models, but none have proved to be very successful.

”…mikä on leimaa antava niinku tämmöseen internetaikakauteen on, että

ne liiketoimintalogiikat, ne ei oo enää kauheen yksinkertaisia. Tämmönen pe-rinteinen bisnes, vaikka sanomalehden painaminen, se on hirveen yksinkertainen se peruslogiikka siinä. Mutta sä joudut rakentaan niinku varsin monimutkaisen liiketoimintamallin, jossa kaikki kompo-nentit, jotta siitä tulee, jotta sä saat siitä kannattavan.”

”Jos me sen kuluttajan näkökul-masta katsotaan, niin onko se niin, että se, että ne palvelut eivät ole enää, tai ne sovellukset eivät ole enää tuolla tietoko-neella, vaan se, että ne on tuolla verkossa, niin sillähän ei niinku kuluttajan näkökul-masta, sehän ei oo relevantti asia ollen-kaan, missä ne on, mun mielestä, mutta se relevantti asia on siinä, että sillon ku ne on siellä pilvessä, niin joku muu maksaa. Ne on aika usein kuluttajalle ilmaisia, sen takia, että se ansaintalogiikka lähtee jos-tain aivan muualta. Ja se, että – tää on suosittuakin, musta tuntuu, että että kyl-lä tästä loppukäyttäjän näkökulmasta, kuluttajan kannalta, se ilmaisuus on, se on tosi, se on...”

”...Mä luulen, että mä en ehkä olis enää ihan tässä jos mulla se vastaus olis. Mutta tota, kyllähän se varmaan, mun mielestä tuo YouTube-esimerkki on haus-ka sinällään, että kyllähän ne perustajat teki rahaa, mutta et onks Google tehnyt rahaa se on sitten se seuraava kysymys ja mun käsittääkseni ei vielä. Mut et, se-hän onkin vähän semmonen avoin beta varmaan myös siinä suhteessa kaikki tää touhu, että uskotaan siihen, että kun saa-daan tuollaisia massoja liikenteeseen, nii-tä silmäpareja saadaan sinne, niin se on kuitenkin jollain tavalla sellainen, mistä voidaan se raha ennemmin tai myöhem-min tehdä, mutta sitä mallia ei oo vielä keksitty, ja se haaste varsinkin YouTubella ja noilla on, että kun sinne yritetään pu-ristaa tai on mietitty …”

Some remarks regarding the trends

Evolving digital media that is inher-ently social is reshaping our lives. Blogs, wikis, tagging, podcasts, and social networking websites such as MySpace, YouTube, Facebook and Flickr have radically changed user interactions on the Web from a simple, static, unidirec-tional consumption model to a com-plex, dynamic, multidirectional, par-ticipation model. With the emergence of a mobile phone as a ubiquitous platform for media production and consumption, people are transform-ing media participation on the per-sonal, social, and global levels. We can now gather and link media metadata about the spatiotemporal context and social community of media, and more importantly, capture and use the data to enable people around the world to create, describe, find, share, and remix media content, and to connect to each other in ways that have not been avail-able never before.

Consequently, people are increas-ingly engaged in the iterative design, development, and analysis of large scale socio-technical systems that will ultimately connect billions of human beings, computational devices, and media assets into a global processing network. Therefore, it has been sug-gested (e.g. Marc Davis from Yahoo!) that the future Web will be reshaped by the creation of large scale mobile so-cial media systems, in which a web of stored documents gradually evolving into a live network connecting billions of humans around the planet across space and time. However, deficiencies persist in our understanding of this emerging phenomenon. The design of these socio-technical systems calls

57

for interdisciplinary teams to tackle the complex challenges related to these new services. It requires us to rethink the core assumptions and boundaries of social science, information science, computer science, media studies, and design. The main intellectual shift re-frames technological challenges for mobile media within social and hu-manistic understandings of context, communication, information, memory, and identity. As a result, by understand-ing mobile media technologies as socio-technical systems that connect people to the spatiotemporal contexts of their activity and to each other, we also provide a platform for new service and technological innovations.

Towards the business models of the future

What kind of business model and value creation related managerial conclu-sions, then, can be drawn from the analysis? In the following we will use the ecosystem approach to classify the players of the ICT sector and discuss the consequences of convergence and other trends by category: consultants, application software developers, sys-tem and infrastructure software devel-opers, system and infrastructure inte-grators, infrastructure and application service providers, hardware developers, and other type of actors.

Among consultants the tradi-tional approach to business has been two-fold, either being in the verticals, focusing on selected technologies, or serving national or customer-group specific, rather narrow horizontals. For consultants it can be concluded that the new business opportunities can be found in the horizontals. Especially, the

packaged or bundled services area and in the service side and cross-industry integration in the technology side ap-pear as opportunities. The fundamental question in the whole ICT sector is how fast other than entertainment related services are coming to play a greater role within the ICT sector, and what these other-than-entertainment serv-ices shall be, especially in consumer business.

For application software develop-ers the trend is clear, these companies can find new opportunities within services in the horizontals. The ability to build business or consumer applica-tions that utilize technological conver-gence with new features that enable the use of advertising as a business model, that include context awareness, or enable data intensive services are examples of opportunities emerging from the data. Especially areas where Internet and mobile can be connected appear as interesting. At least to some degree, it can be stated that the busi-ness environment of both consultants and application software developers are similar, as these companies are used to looking and identifying new oppor-tunities in changing environments.

For infrastructure software devel-opers the trends in the ICT sector are not so promising, majority of the firms seem to be hoping that the business they are in remains in the verticals. The fast industry maturation together with increased convergence has lead to a shrinking market with a high tendency towards off-shore outsourcing. Also, due to convergence the transforma-tion from mobile business to internet service provisioning where mobile and fixed communications become as one from technology perspective, the

driving forces are not favoring compa-nies in the mobile sector but those that can combine mobile with internet. In this kind of situation strong foothold in the traditional verticals is a danger, as companies tend to focus on their old core as a response to the convergence related crisis.

For system and infrastructure in-tegrators the message of the trends in the ICT sector is similar as for the infra-structure software developers: out from the old verticals, and fast! Being serv-ice-oriented, the change towards the horizontals and new businesses should be easier for system and infrastructure integrators than for infrastructure soft-ware developers. New opportunities for system and infrastructure integra-tors can be found in service delivery platforms as well as value-added con-tent aggregation and access services.

For the infrastructure and applica-tion service providers there is a two-fold dilemma in the business; either to be shrinking inside the existing hori-zontals in which they have a position, or become a content provider. How-ever, there seems to be a profound difference in the business approaches of the dominant content providers (of the entertainment services) and the infrastructure and application service providers. It is a good question wheth-er the content providers can really win customers from the infrastructure and application service providers, but if they can, the business that remains is a rather narrow, to become only a pipeline. An interesting project in this is the Supermatrix-project of the re-gional infrastructure and application service providers. Another strategy that some of the infrastructure and applica-tion service providers have adopted

58

is diversification towards something completely new. The idea seems to be to use the existing pipeline as a basis for new services that are integrated with the existing pipeline.

For hardware developers the trends lead again to two-fold conse-quences, whether to remain inside verticals and focus on certain technolo-gies, end customer groups, or devices, or to find short-cuts across different areas of the business ecosystem. By short-cuts it is meant that by combin-ing technologies and applications or devices directly with services, the com-panies find a way to cross or skip exist-ing verticals and create new horizontal businesses. A good example of this is Apple with the combination of iPhone and Appstore or iPod and iTunes. In addition to the short-cuts, ubiqui-tous business and intelligent devices emerged from the data as opportuni-ties for the hardware developers.

Other types of actors consist of a variety of different players, and the con-sequences of the trends vary accord-ingly. Regulators, research and educa-tion organizations, non-profit organiza-tions, or consumer movements can be categorized to be in this group. What trends has the greatest effects on these group and what kind of consequences they induce, depends on the case. The most interesting of the organizations in this category can be said to consist of social media related organizations that do not directly generate revenue or profit, but function as platforms for oth-er businesses to thrive. So for Facebook nor Twitter has been able to generate considerable revenue streams, but the hundreds of millions users constitute an interesting potential for other com-panies to mobilize as customers.

To sum up the above discussion, divergence and fragmentation in the media landscape seems to be overrid-ing the consequences of convergence. In the same time, the access, identi-fication and utilization of user data, wherever located within converging networks, is increasingly becoming the source of competitive advantage for the ICT companies. Social media and its phenomena change industry structures and business models in unpredictable ways, purely vertical or horizontal based business models are deteriorating, and companies are looking for short-cuts, sidetracks, and across-traditional-seg-mentation strategies. One of the key drivers in this the cloud computing that seems to be changing the rules for both business customers and consumers.

Strategies used within the ICT sector

As regards to value creation, several dif-ferent kinds of networks were identified within the companies studied. All basic methods of value creation were men-tioned, novelty creation, efficiency de-velopment, complementarities, and ties. Novelty creation was most often related to offering either through new products and services or new delivery channels and content. Efficiency development as a strategy consisted most often of at-tempts to improve cost-efficiency and it was, astonishingly, mentioned almost solely by infrastructure and application service providers. Complementarities were mentioned as a value creation strategy by all groups of the ICT ecosys-tem. Bundling of products, services or content was a typical strategy. Ties were utilized as a strategy most often in the case of consumer businesses, and the

realization of this strategy took place for example through cannibalization of own products and services.

The future business models of the ICT sector appear to stem from a vari-ety of rather strange and contradictory considerations.

” Ja muuten on totta kai erilaisia businessmalleja ja luodaan hieno niche-teknologia ja perustetaan yritys, jonka joku näistä isommista edellä mainituista sitten aikanaan ostaa, niin sehän on mo-nen valitsema liiketoimintamalli. Kaikki ei siitä onnistu….”

”Jos me lähdetään konvergenssi-maailmaan, niin kuvuttelisin, että siellä tarvii juuri tällaisia, miksi niitä sanois, konsortioita tai tällaisia palveluverkosto-ja, joilla on kaikilla oma lokeronsa siinä koko ketjussa, arvoketjussa, mikä tulee loppuasiakkaalle.”

”Niin, siihen suuntaan se näyttää nyt menevän jos katsoo, jos ajatellaan, että IP-maailma ikään kuin ensimmäi-senä tuhosi operaattoreiden perinteisen vuosisataisen ansaintalogiikan, että ai-katapahtumapohjaiseen veloitukseen liittyvistä malleista, ja taas tuolla medi-apuolella noitten perinteisten mallien medioiden dominanssi oli hyvin stabiili, tavallaan tämä muutamat pääkanavat, ja nyt näyttää siltä vaan, että ihan sa-manlainen liiketoimintamallien, voisko sanoa perinteisten mallien, tuhoutumi-nen tapahtuu tuolla mediakentässä.”

”Ei ole business-mallia, sama muu-ten tulee Facebookilta, ei oo business-mallia.. Ei ole siis strategiaa, joka pohjau-tuu johonkin tiettyyn bisnesajatteluun.” “ Googlella oli, mun mielestä, lueskelin sitä kirjaa, niin niillä 2003, kuus vuotta aloit-tamisen jälkeen alko ensimmäisen kerran hahmottuun jotakin ajatuksia siitä, mi-ten rahaa tehdään.”

59

What the real business models and strategies will be in the future in the ICT sector is an interesting question. Rather than answering this question directly, we would encour-age the reader to draw conclusions from the quotations presented in this report. However, some light on this business model / strategy question is shed by Porter’s (1980) generic strate-gies approach, as many of the inter-viewed used that terminology in a manner that reveals at least partial in-consistency between the theory and the practice. Porter’s ideas on strat-egy were based on the dimensions of scope and focus of competition, which led to the idea that there are three generic strategies (cost leader-ship, differentiation, and cost or dif-ferentiation based focusing) available for companies within an industry. Despite the fact that the ICT sector as such can not be understood as an industry but rather as a compilation of different interrelated industries, in-dustry thinking however providers an applicable and practical way of clas-sifying the results.

Cost leadership strategies were mentioned by several companies in-terviewed. The following themes were found to appear in the data:1. Flat-rate pricing and related ration-

alization of capacity and operationsa. Profit maximization, e.g., by flat

rate pricing that allows to in-crease profits as indirect costs can be pruned

b. Capacity optimizationc. Selling out over-capacity and de-

veloping the needed networkd. Minimizing costse. Decreasing the amount human

resources needed in business,

automation of production and striving for maximized efficiency.

Example data related to cost leadership strategies:

”ei se oo helppoa noilla mobiiliope-raattoreillakaan – kyllä ne nyt pärjäilee, mutta voimakkaita investointeja niittenki pitää tehdä näihin LTE:hen ja siihen, että ne saattaa 3G-verkkonsa sellaseks, että ne oikeesti pääsis syömään niitä hitaita kiinteitä laajakaistoja [epäselvää] toimi-valla mokkulalla.”

”vahva usko nyt on xxxn suunnalla tuohon televisioon, niin mites näkisit nyt noi tulevaisuuden liiketoimintamagnee-tit ja tulovirrat? Laajakaistassahan on jo aikoja sitte menty tähän flatrateen ja yleisesti ainakin uskotaan, että mobiilis-sa datasiirron väärinkäyttö Suomessa ja mobiili-internetin käyttö johtuu siitä, että siel ei oo menty flatraten hinnoitteluun heti kättelyssä”

”tän IT:n ja tietoliikenteen sulautu-miseen, et se on vähä niin ku sellasta kon-vergoitumista – että ykshän ominaisuus on tietenki se, et nää niin ku puhelinvaih-dejärjestelmät, mitä kuitenki tarvitaan – siis ei kiinteät puhelut kokonaan katoa, tietyt työtehtävät sitä edellyttää, niin se muuttuu niiden järjestelmien kauppa- ja ylläpito IT-järjestelmien kaupaks. Et ei oo erikseen enää puhelinvaihdekauppaa ja jotaki IT-järjestelmäkauppaa. Ne sulau-tuu ja tällä tietoliikenteellä on voimakas kytkös tuohon IT:hen, että siellähän on siirtymä käynnissä, et palvelimet siirtyy palvelinkeskuksiin ja jonkalainen mekin ollaan tähän investoitu”

”se raha, mikä teleoperaattoreilla on kiinni infrastruktuurissa, ja myöskin millä teleoperaattori tekee kannattavuuten-sa, koska sen pitää tienata sen seuraa-van sukupolven investointirahat näillä verkoilla, niin kyllähän se tehdään siinä

bittiputkiosuudessa. Tää palveluliiketoi-minnan, se on asiakkaiden hankkimisen kannalta keskeinen, mutta kannattava... uskaltaisin väittää, kannattavuuden kan-nalta täysin marginaalinen, jos mä teen tämmösen raa’an jaon siitä. Ja, se bittiput-ken kannattavuus, niin se on periaatteessa täysin kilpailutilannelähtöinen asetelma...”

”periaatteessa semmoinen operaat-tori, joka on automatisoinut itsensä, niin sehän pystyy pelaamaan aika pienellä henkilömäärällä. Siis tarvitaan asiakastu-en, myynnin, asiakastuen ja suunnittelun henkilöitä, mut ei tarvita sitä back-officea.”

Differentiation strategy, especially relat-ed to services and service provisioning but also product and application devel-opment, was a commonly mentioned strategy by the interviewed compa-nies. The following themes were found to appear in the data:

1. Customer’s value maximizationa. Reduction of customers’ costs i. Free offering to hook customersb. Increasing efficiency of own op-

erationsc. Additional or bundled services d. Utilizing convergence in handsets i. Call optimization ii. Software integratione. Leasing hardware or handsetsf. Providing total solutions

(rationalization)g. Providing customized solutions

2. New servicesa. New applications or platformsb. New content i. Music ii. Social media services iii. Service communities iv. Utility services as opposed to

entertainment services3. Extended services

a. New business models.

60

Example data related to differentiati-on strategies:

”kyllä se on tämmöset tv-kaistat, laajakaistat, televisiopalvelut, Saunavi-siot ja niin ne on ne jutut. Teräväpiirto siellä pikantti lisää, missä kaistavaati-musta, mikä taas pelaa kiintiän operaat-torin pussiin on se syy, minkä takia nämä mobiilisuulla puhuvat isot operaattorit puhuvat ja investoivat kaupunkeihin rai-vokkaasti koko ajan.”

”nimenomaan palveluiden valiko-ma kasvaa. Ja sehän nyt siis tarkoittaa luonnollisesti niiden kyseisten palve-luiden tarjoajien kannalta, jotka on siis enemmän näissä konvergensseissa, verk-kojen ja niiden palveluiden operoinnissa mukana, niin, niillähän nimenomaan sama asia tarkoittaa kilpailutilanteen kiristymistä. Että VoIP-puhelut, tai ylipää-tänsä puheviestintäpalvelut, on varmaan hyvä esimerkki siitä. Ja sitten vielä – tää taas liittyy läheisesti näihin ansaintalogii-koihin – että jos nyt VoIP-puheluit käyttää esimerkkinä, niin koska on todennäköis-tä, että VoIP-puheluilla, niin kuin niillä jo nytkin on, mutta ehkä tulevaisuudessa viel selvemmin rakentein, niin toimijoita, jotka ei itse siitä VoIP-puhelun välityk-sestä välttämättä hae rahaa ollenkaan, vaan ansaintalogiikka perustuu johon-kin mainostuloihin tai johonkin muuhun tällaiseen, niin, tällähän on sitten kilpai-lutilanteessa sikäli radikaali merkitys, et ne toimijat, joilla se ansaintalogiikka on ollut puhtaasti sen toiminnan varassa, mitä joku muu tulee tarjoaan ilmaseks, niin sen vois kokea jopa haastavana.”

”siirtotie ei sinänsä oo ilmanen, mut sitte taas sielläki kilpailu laskee sitä hintaa mitä ihmiset on halukkaita maksamaan ja sen lisäksi sen päälle pitää alkaa pake-toida palveluita, ja siinä liiketoimintamal-li pitäs olla niin läpinäkyvä, niin selkeä et kuluttaja ymmärtää sen, et se ei missään

nimess mieti sitä et “tää on kallista”, sen ei pitäs niinku ajatella sitä mediaa käyttäes-sä, että tää on kallista, vaan käyttää sitä.”

”Me omalta osaltamme silloin täh-dätään enemmänkin siihen, että meillä pitäis olla tästä infrastruktuurista lähti-en tämmönen avoin palveluvalinta, että asiakas voi tehdä... tai siihen voidaan olla niinku operaattorina sanomassa, että käytät vain niitä palveluja, joita olemme operaattorina tähän määritelleet, vaan asiakkaalla on jollain valikkopohjaisella ajattelutavalla, niin omalla valinnalla mahdollisuus niitten palvelujen valin-taan. Voi olla, että meillä on paikka siinä kohtaa niin kuin ehkä markkinoilliseen ja laskutukselliseen, tän tyyppiseen yhteis-työhön palveluntuottajien kanssa. Mutta ainakaan mä en näe niinku meillä roolia itsenäisenä sisällönpalveluntuottajana, jos täällä on yhteisöjä, jotka tuottaa hy-vää juttua, voidaanhan me olla edistä-mässä niiden välittämistä eteenpäin.”

”yks tapa erilaistua, että tarjotaan meidän maailmassa kaikkien palvelut, on se sitten nää operaattorit tai sitten eri näköset viihdetalot, mitä ne nyt onkaan sitten.”

”ihmisethän on niin kuin omaehtoi-sia sisältöjä lähteneet tekemään, hurjia määriä. Ja kun teknologia antaa eväät, ja ne on kaupallisesti järkevillä hinnoil-la, mun on hiton vaikee nähdä, miksi tämmönen tota liikkuvan kuvan -buumi ei nousisi. Ja jos mietit sitä, että minkä-laista massaa edellyttää se liikkuva kuva suhteessa niihin isoihin, hienoihin vaik-kapa kuvatiedostoihin, jota olet tähän mennessä siirtänyt, niin pikemminkin, mä ennustan, että on mahdollista, että se ryöpsähtää vielä voimakkaampaan kehitykseen.”

”sinne on pakko synnyttää, uusia malleja, jotka aivan samalla lailla kuin mainonta vaatii sen, että on hyvä käsitys

asiakkaiden niin historiallisesti käyttötie-dosta kuin realistisesta käyttötiedosta, jolloin voidaan tarjota palveluita, ihan niinku kaikki muutkin kanavat, mutta kustomoida niitä reaaliaikaisesti just ja vain siihen tarpeeseen.”

”Mut pystyykö esimerkiksi suomalai-set operaattorit, niin, aidosti muuntautu-maan palveluntarjoajiksi, sisältöpalvelun tuottajiksi? Tuleeko siihen niinku kolman-sii osapuolii? Tota... mä sanoisin niinku näin, että sisällön välittämisestä, siitä ei... siinä on nähtävissä vaan datatuloja, mutta operaattorit pystyy sitten raken-taan lisäarvopalveluita sen sisällön pääl-le… netin kautta kaikesta kontentista tu-lee ilmaista, sisällöstä tulee ilmaista, ja se itse se sisältö toimii vain mainostuksena maksullisille palveluille, lisäarvopalveluil-le tän sisällön päällä”

Focusing strategies were by far the most common strategy utilized within the Finnish ICT sector, and it does not appear plausible that the importance for focusing would decrease in the near future. Focusing strategies seem to be more adaptive than aggressive in nature, and the company focus was most often found through the role or position the company had in the value chain network or business ecosystem. At least the following focusing strate-gies were found to appear among the data:1. Geographical focus

a. Regionalb. Nationalc. Global

2. Segmentation focusa. Specific customer group focusb. Specific customer need -based

focusc. Specific channel or position

based focus

61

3. Technology focusa. Niche in the ecosystem as a focusb. Application or a device as a focusc. Content based focus

4. Business model focusa. Internet and/or mobile

Theoretical conclusions and Implications for future research

As the final conclusions of the research, a few words must be devoted to theory level conclusions and implications for future research. The theory level ap-proaches selected for this research for understanding the ICT sector included industry approach, business ecosys-tem approach, network approach and resource-based approach. All these approaches were well suited for the

analysis and helped to provide mean-ingful interpretations and results from the data. The triangulation of the differ-ent approaches was however found to be rather complicated as these theories partly include inter-related and over-lapping concepts and items. Both from academic and managerial perspective the ecosystem thinking was found to provide a consistent framework for analyzing the value creation and strate-gies of the ICT companies. The ecosys-tem thinking can even accommodate the contradictory aspects of the net-work and resource-based theories, and value creation and differing business models can be understood within the framework.

One of the findings of the panel discussions was the deep concern of the experienced ICT managers and

entrepreneurs regarding the usability of traditional strategy tools utilized by companies. It was found out that the traditional strategy analysis tools and concepts shed light to modern busi-ness problems of the ICT sector only to a limited degree. As the ICT sector is rather volatile and fast changing, as-sumption-based, scenario-based, and game-like strategy tools were thought to work better than the traditional ones.

Also, the ICT sector today appear as a field in which the traditional in-dustry boundaries are bended, twisted and disappearing, not only between business-to-business sectors but also between consumers and business cus-tomers. New theories and concepts for capturing and analyzing this kind of industry changes would be welcomed by both academics and practitioners.

62

References

Achrol,R.S.(1997).“ChangesintheTheoryofInterorganizationalRelationsinMarketing:TowardaNetworkParadigm.”JournaloftheAcademyofMarketingScience,25(1),56-71.

Afuah,A.&Tucci,C.L.(2001).Internetbusinessmodelsandstrategies.Boston:McGraw-Hill,Irwin.

AhokangasP.&JuhoA.(2008):AgainstAllOdds:TowardstheTheoryofTemporaryCompetitiveAdvantageinInternationalization.Paperpresentedatthe8thInternationalConferenceonCompetence-BasedManagement,Copenhagen,Octoberthe1st–3rd,2008.

Ahola,E.&Palkamo,A.toim.(2009):Megatrenditjame.Tekesinkatsaus.255/2009.Tekes.

Aldrich,H.&Zimmer,C.(1986).Entrepreneurshipthroughsocialnetworks.In:TheArtandScienceofEntrepreneurship.EdsD.SextonandR.Smilor.Cambridge,MA:BallingerPublishingCompany.

Anderson,J.C.,Håkansson,H,.&Johanson.J.(1994).Dyadicbusinessrelationshipswithinabusinessnetworkcontext.JournalofMarketing,58,1–15.

Amit,R.&Zott,C.(2001).Valuecreationine-business.StrategicManagementJournal,22(6-7),pp.493—520.

ApplegateL.M.(2001).Emerginge-businessmodels:lessonsfromthefield.HBSNo.9-801-172.HarvardBusinessSchool,Boston.

BarneyJ.(1986),Strategicfactormarkets:expectations,luck,andbusinessstrategy.ManagementScience,32(October),1231-1241.

BarneyJ.(1991),Firmresourcesandsustainedcompetitiveadvantage.JournalofManagement,17:1,99-120.

Baron,J.&Hannan,M.(2002).Organisationalblueprintsforsuccessinhigh-techstart-ups:LessonsfromtheStanfordprogramonemergingcompanies.CaliforniaManagementReview,44:3,8–36.

Birley,S.(1985).Theroleofnetworksintheentrepreneurialprocess.JournalofBusinessVenturing,1:1,107–117.

BrandenburgerA.M.&Nalebuff,B.(1995):TheRightGame:UseGameTheorytoShapeStrategy.HarvardBusinessReview.

Burt,R.(1992).StructuralHoles:TheSocialStructureofCompetition.Cambridge,MA:HarvardUniversityPress.

Buesa,M.,Heijs,J.,MartínezPellitero,M&Baumert,T.(2006).Regionalsystemsofinnovationandtheknowledgeproductionfunction:TheSpanishcase.Technovation,26:4,463–472.

Calia,R.,Guerrini,F.&Moura,G.(2007).Innovationnetworks:fromtechnologicaldevelopmenttobusinessmodelreconfiguration.Technovation,27:8,426-432.

Carlsson,B.&Eliasson,G.(2003).Industrialdynamicsandendogenousgrowth.IndustryandInnovation,10:4,435–455.

ChengE.,Heng,W.L.,Love,P.&IraniZ.(2001).Ane-businessmodeltosupportsupplychainactivitiesinconstruction.LogisticsInformationManagement14(1/2),pp.68–77.

ChiT.(1994),Tradinginstrategicresources:necessaryconditions,transactioncostproblemsandchoiceofexchangestructure,StrategicManagementJournal,15:4,271-290.

Christensen,C.(1997).Innovator’sDilemma.Cambridge,MA:HarvardUniversityPress.

Christensen,P.S.,Madsen,O.&Peterson,R.(1994).Conceptualizingentrepreneurialopportunityidentification.In:MarketingandEntrepreneurship:ResearchIdeasandOpportunities.Ed.G.Hills.Westport,CT:GreenwoodPress.

Christensen,P.S.&Peterson,R.(1990).Opportunityidentification:Mappingthesourcesofnewventureideas.In:FrontiersofEntrepreneurshipResearch.EdsN.Churchill,W.Bygrave,J.Hornaday,D.Muzyka,K.VesperandW.WetzelJr.Wellesley,MA:BabsonCollege.

Christensen,C.&Raynor,M.(2003).Innovator’sSolution.HarvardUniversityPress,Cambridge,MA.

Coleman,J.(1994).FoundationsofSocialTheory.Cambridge,MA:HarvardUniversityPress.

deKoning,A.&Muzyka,D.(1996).Theconvergenceofgoodideas:Whenandhowdoentrepreneurialmanagersrecognizeinnovativebusinessideas?In:FrontiersofEntrepreneurshipResearch.EdsN.Churchill,W.Bygrave,J.Butler,S.Birley,P.Davidsson,W.GartnerandP.McDougall.Wellesley,MA:BabsonCollege.

63

DierickxI.&CoolK.(1989),Assetstockaccumulationandsustainabilityofcompetitiveadvantage,ManagementScience,35:12,1505-1511.

Downing,S.(2005).Thesocialconstructionofentrepreneurship:Narrativeanddramaticprocessesinthecoproductionoforganizationsandidentities.EntrepreneurshipTheoryandPractice,29:2,185–204.

Eckhardt,J.&Shane,S.(2003).Opportunitiesandentrepreneurship.JournalofManagement,29:3,333–349.

EisenhardtK.M.&Martin,J.M.(2000),Dynamiccapabilitieswhatarethey?StrategicManagementJournal21,1105-1121.

Eliasson,G.(2005).Thenatureofeconomicchangeandmanagementinanewknowledgebasedinformationeconomy.InformationEconomicsandPolicy,17(4),428–456.

Eliasson,G.,Johansson,D.&Taymaz,E.(2004).Simulatingtheneweconomy.StructuralChangeandEconomicDynamics,15,289–314.

Floyd,S.&Woolridge,B.(1999).Knowledgecreationandsocialnetworksincorporateentrepreneurship:Therenewaloforganizationalcapability.EntrepreneurshipTheoryandPractice,23:3,123–143.

Ghoshal,G.,Bartlett,C.,&Moran,P.(1999).ANewManifestoforManagement.SloanManagementReview,40,3:9–20.

Granovetter,M.(1973).Thestrengthofweakties.AmericanJournalofSociology,78,1360–1380.

Granovetter,M.(1985).Economicactionandsocialstructure:Theproblemofembeddedness.AmericanJournalofSociology,91:3,481–510.

Grimaldi,R,&Grandi,A.(2005).Businessincubatorsandnewventurecreation:Anassessmentofincubatingmodels.Technovation,25(2),111–121.

Groen,A.(2005).Knowledgeintensiveentrepreneurshipinnetworks:Towardsmulti-level/multidimensionalapproach.JournalofEnterprisingCulture,13:1,69–88.

Gulati,R.,Nohria,N.,andZaheer,A.(2000).“StrategicNetworks.”StrategicManagementJournal,21(3),203-215.

Hamel,G.(1998).StrategyInnovationandtheQuestforValue.SloanManagementReview,39,2:7–14.

Hamel,G.(1999).BringingSiliconValleyInside.HarvardBusinessReview,77,5:71–94.

Hamel,G.(2000).Leadingtherevolution.NewYork:Plume.

HelfatC.E.&PeterafM.A.(2003),Thedynamicresource-basedview:capabilitylifecycles,StrategicManagementJournal,24,997-1010.

Hills,G.(1995).Opportunityrecognitionbysuccessfulentrepreneurs:Apilotstudy.In:FrontiersofEntrepreneurshipResearch.Eds

M.Hay,W.Bygrave,S.Birley,N.Churchill,R.Keeley,B.BirdandW.Wetzel,Jr.Wellesley,MA:BabsonCollege.

Hills,G.&Lumpkin,G.(1997).Opportunityrecognitionresearch:Implicationsforentrepreneurshipeducation.ProceedingsoftheINTENT.MontereyBay,USA.

Hills,G.&Shrader,R.(1998).Successfulentrepreneurs’insightsintoopportunityrecognition.In:FrontiersofEntrepreneurshipResearch.EdsP.Reynolds,W.Bygrave,N.CarterandS.Manigart.Wellesley,MA:BabsonCollege.

Håkansson,H.,andFord,D.(2002).“HowShouldCompaniesInteractinBusinessEnvironments.”JournalofBusinessResearch,55(2),133-139.

Håkansson,H.,Johanson,J.(1992).AModelofindustrialnetworks.InAxelsson,B.,Easton,G.(Eds.)IndustrialNetworksanewviewofreality.London:Routledge,pp.28-34.

Håkansson,H.&Snehota,I.(1989).Nobusinessisanisland:Thenetworkconceptofbusinessstrategy.ScandinavianJournalofManagement,4:3,187–200.

Håkansson,H.,Snehota,I.(1995).DevelopingRelationshipsinBusinessNetworks.London:InternationalThomsonBusinessPress.

Håkansson,H.andSnehota,I.(2006).“Nobusinessisanisland’’17yearslater.ScandinavianJournalofManagement,22(3),256–270.

Iacobucci,D.,&Hopkins,N.(1992).“ModelingDyadicInteractionsandNetworksinMarketing.”JournalofMarketingResearch,29(1),5-17.

Jarillo,J.C.(1988).“OnStrategicNetworks.”StrategicManagementJournal,9(1),31-41.

Johannisson,B.(1988).Businessformation–anetworkapproach.ScandinavianJournalofManagement,4:3,83–99.

Johannisson,B.,Alexandersson,O.,Nowicki,K.&Senneseth,K.(1994).Beyondanarchyandorganization–entrepreneursincontextualnetworks.EntrepreneurshipandRegionalDevelopment,6:3,329–356.

Järvensivu,T.(2007)Values-drivenManagementinSrategicNetworks:ACaseStudyoftheInfluenceofOrganizationalaValuesonCooperation.HelsinkiSchoolofEconomics-HSEPrint2007-

Kaish,S.&Gilad,B.(1991).Characteristicsofopportunitiessearchofentrepreneursversusexecutives:Sources,interests,andgeneralalertness.JournalofBusinessVenturing,6:1,45–61

Keeble,D.,Lawson,C.,Smith,H,Moore,B.&Wilkinson,F.(1998).Internationalisationprocesses,networking,andlocalembeddednessintechnology-intensivesmallfirms.SmallBusinessEconomics,11:4,327–342.

64

Keeble,D.,Lawson,C.,Moore,B.&Wilkinson,F.(1999).Collectivelearningprocesses,networking,and“institutionalthicknessintheCambridgeregion.RegionalStudies,33:4,319–332.

Klint,M.B.,&Sjöberg,U.(2003).“TowardsaComprehensiveSCP-modelforAnalysingStrategicNetworks/Alliances.”InternationalJournalofPhysicalDistribution&LogisticsManagement,33(5),408-426.

Krackhardt,D.(1995).Entrepreneurialopportunitiesinanentrepreneurialfirm.Astructuralapproach.EntrepreneurshipTheoryandPractice,19:3,53–69.

Larson,A.&Starr,J.(1993).Anetworkmodeloforganizationformation.EntrepreneurshipTheoryandPractice,17:2,5–15.

McGahan,A.(2004).HowIndustriesEvolve:PrinciplesforAchievingandSustainingSuperiorPerformance.Cambridge,MA:HarvardBusinessSchoolPress.

Manimala,M.(1992).Entrepreneurialheuristics:AcomparisonbetweenhighPI(pioneering-innovative)andlowPIventures.JournalofBusinessVenturing,6:7,477–504.

McGahan,A.&Silverman,B.(2001).Howdoesinnovativeactivitychangeasindustriesmature?InternationalJournalofIndustrialOrganization,19,1141–1160.

Messerschmitt,D.&Szyperski,C.(2003).SoftwareEcosystem:UnderstandinganIndispensableTechnologyandIndustry,TheMITPress.

Miles,R.E.,andSnow,C.C.(1984).“Fit,FailureandTheHallofFame.”CaliforniaManagementReview,26(3),10-28.

MillerD.&ShamsieJ.(1996),Theresource-basedviewofthefirmintwoenvironments:theHollywoodfilmstudiosfrom1936-1965.TheAcademyofManagementJournal,39:3,519-543.

Möller,K.&Rajala,A.(2007)XXXXX

Möller,K.,Rajala,A.,&Svahn,S.(2005).”StrategicBusinessNets-TheirTypeandManagement.”JournalofBusinessResearch,58(9),1274-1284.

Möller,K.,&Svahn,S.(2003).”ManagingStrategicNets:ACapabilityPerspective.”MarketingTheory,3(2),209-234.

Nahapiet,J.&Ghoshal,S.(1998).Socialcapital,intellectualcapital,andtheorganizationaladvantage.AcademyofManagementReview23:2,242–266.

OECDDirectorateforScience,TechnologyandIndustryCommitteeforInformation,ComputerandCommunicationsPolicy.(2008).ConvergenceandNextGenerationNetworks.MinisterialBackgroundReportDSTI/ICCP/CIPS(2007)2/Final.OECDMinisterialMeetingontheFutureoftheInternetEconomy.Seoul,Korea,17-18June2008.

OECD(2008).SummaryoftheChair.OECDMinisterialMeetingonthe“FutureoftheInternetEconomy”.Seoul,Korea,17-18June2008.

Oliver,A.&Liebeskind,J.(1998).Threelevelsofnetworkingforsourcingintellectualcapitalinbiotechnology:Implicationsforstudyinginterorganizationalnetworks.InternationalStudiesofManagementandOrganization,27:4,76–103.

Oliver,C.(1997),Sustainablecompetitiveadvantage:combinedinstitutionalandresource-basedviews,StrategicManagementJournal18:9,697-713.

Pacheco-de-Almeida,G,Henderson,J.,&Cool,K.(2008).Resolvingthecommitmentversusflexibitytrade-off:theroleofresourceaccumulationlags.

StrategicManagementJournal51:3,517-536.

Peng,M.(2001).Theresource-basedviewandinternationalbusiness.JournalofManagement27,803-829.

Peteraf,M.(1993),Thecornerstonesofcompetitiveadvantage:aresource-basedview,StrategicManagementJournal14:3,179–192.

Peterson,R.(1985).Creatingcontextsfornewventuresinstagnatingenvironments.In:FrontiersofEntrepreneurshipResearch.EdsHornaday,J.,E.Shils,J.TimmonsandK.Vesper.Wellesley,MA:BabsonCollege.

PorterM.E.(1980).CompetitiveStrategy.TechniquesforAnalyzingIndustriesandCompetitors.TheFreePress.NewYork.

PorterM.E.(1985).CompetitiveAdvantage.CreatingandSustainingSuperiorPerformance.NewYork.TheFreePress.

PorterM.E.(2001).StrategyandtheInternet.HarvardBusinessReview,79(2),pp.63–78.

PrahaladC.K.andHamelG.(1990):TheCoreCompetenceoftheCorporation.HarvardBusinessReview68:3.May-June1990.

RajalaR.,Rossi,M.&Tuunainen,V-K.(2001).Softwarebusinessmodels:Aframeworkforanalyzingsoftwareindustry.TechnologyReview108/2001.Helsinki:Tekes.

Reynolds,P.(1991).Sociologyandentrepreneurship:Conceptsandcontributions.EntrepreneurshipTheoryandPractice,16:2,47–70.

Rayport,J.F.&Jaworski,B.J.(2002).Casesine-Commerece.Boston:McGrawHill.

RothK.(1995),Managinginternationalinterdependence:CEOcharacteristicsinaresource-basedframework,TheAcademyofManagementJournal,38:1,200-231.

Sarason,Y.,T.Dean&Dillard,J.(2006).Entrepreneurshipasthenexusofindividualandopportunity:Astructurationtheory.JournalofBusinessVenturing,21:3,286–305.

Sarasvathy,S.(2001).Causationandeffectuation:Towardatheoreticalshiftfromeconomicinevitabilitytoentrepreneurialcontingency.AcademyofManagementReview,26(2),243–263.

65

SchreyöggG.&Kliesch-EberlM.(2007),Howdynamiccanorganizationalcapabilitiesbe?Towardsadual-processmodelofcapabilitydynamization,StrategicManagementJournal28,913-933.

Shafer,S.M.,Smith,H.J.&Linder,J.C.(2005).Thepowerofbusinessmodels.BusinessHorizons(2005)48(3),pp.199—207

Shane,S.(2003).AGeneralTheoryofEntrepreneurship:TheIndividualOpportunityNexus.EdwardElgar,Cheltenham.

Sigrist,B.(1999).HowDoYouRecognizeanEntrepreneurialOpportunity?EntrepreneurialOpportunityRecognitioninaSwissContext.Ph.D.Thesis.UniversityofZurich.

Singh,R.,Hills,G.,Hybels,R.&Lumpkin,G.(1999).Opportunityrecognitionthroughsocialnetworkcharacteristicsofentrepreneurs.In:FrontiersofEntrepreneurshipResearch.EdsP.Reynolds,W.Bygrave,K.Shaver,C.Mason,S.Manigart,G.D.MeyerandH.Sapienza.Wellesley,MA:BabsonCollege.

Snow,C.C.,Miles,R.E.,andColeman,H.J.,Jr.(1992).“Managing21stCenturyNetworkOrganizations.”OrganizationalDynamics,20(3),5-20.

Starr,J.&MacMillan.I.(1990).Resourcecooptationviasocialcontracting:resourceacquisitionstrategiesfornewventures.StrategicManagementJournal,11,79–93.

Steyaert,C.,Bowen,R.&VanLooy,B.(1996).Conversationalconstructionofnewmeaningconfigurationsinorganizationalinnovation:Agenerativeapproach.EuropeanJournalofWorkandorganizationalPsychology,6:1,67–89.

Taylor,M.(1999).Thesmallfirmasatemporarycoalition.EntrepreneurshipandRegionalDevelopment,11:1,1–19

TeeceD.J.,PisanoG.&ShuenA.(1997),Dynamiccapabilitiesandstrategicmanagement,StrategicManagementJournal18:7,509–533.

Thorelli,H.B.(1986).“Networks:BetweenMarketsandHierarchies.”StrategicManagementJournal,7(1),37-51.

Timmers,P.(1998).Businessmodelsforelectronicmarkets.ElectronicMarkets,8(2),pp.3—8.

Tsai,W.&Ghoshal,S.(1998).Socialcapitalandvaluecreation:Roleofintrafirmnetworks.AcademyofManagementJournal,41:4,464–476.

Ulhøi,J.(2005).Thesocialdimensionsofentrepreneurship.Technovation,25:8,939–946.

Warsta,J.&Seppänen,V.(2007).Valuenetworkpositioningofexpectedwinners-Analysisofthetopsoftwarebusinessstart-ups.CONFENIS2007,Beijing,China.

vanEijnatten,F.(2004).Chaosandcomplexity:Anoverviewofthe“newscience”inorganizationandmanagement.RevueSciencesDeGestion,40,123–165.

Warsta,J.,Seppänen,V.&Tyrväinen,P.(2005).EvolutionofSecondarySoftwareProductBusinesses:MomentumofConcurrentEnterprising.11thInternationalConferenceonConcurrentEnterprising,UniversityBWMunich,Germany.

Weick,K.(1979).TheSocialPsychologyofOrganizing.AddisonWessley.

WernerfeltB.(1984),Aresource-basedtheoryofthefirm,StrategicManagementJournal5:2,171–180.

WernerfeltB.(1989),Fromcriticalresourcestocorporatestrategy.JournalofGeneralManagement14:3,4-13.

VonHertzen,M.,TimonenJ.andHuuhkaP.(2007).UpdateofGIGA-VAMOS–TechnologyRoadmap.TechnologyReview206/2007.Tekes.

Yli-Renko,H.(1999).Dependence,socialcapital,andlearninginkeycustomerrelationships:Effectsontheperformanceoftechnology-basednewfirms.Ph.D.Thesis.HelsinkiUniversityofTechnology.

Other sources

GartnerNewsroom.http://www.gartner.com/it/page.jsp?id=593207.

SamiSalmenkivi,2007,Konvergenssijamediakentänpirstaloituminen

http://dagmar.typepad.com/digitalikko/2007/04/konvergenssi_ja.html

http://www.fredcavazza.net/2009/04/10/social-media-landscape-redux/

http://www.guardian.co.uk/media/2009/aug/06/rupert-murdoch-website-charges

66

Tekes Reviews in English

274/2010 Business Dynamics and Scenarios of Change. Petri Ahokangas, Miikka Blomster, Lauri Haapanen, Matti Leppäniemi, Vesa Puhakka, Veikko Seppänen, Juhani Warsta. 65 p.

272/2010 The Future of Service Business Innovation. 75 p.

267/2010 Silicon Valley Journey – Experiences of Finnish IT Startups from Dot-Com Boom to 2010. Raija Rapo & Marita Seulamo-Vargas. 176 p.

264/2009 BioRefine Programme 2007–2012. Yearbook 2009.

263/2009 Drive for Future Software Leverage – The Role, Importance, and Future Challenges of Software Competences in Finland. Mikael von Hertzen, Jyrki Laine, Sami Kangasharju, Juhani Timonen and Maarit Santala. 93 p.

259/2009 Technology Transfer of Research Results Protected by Intellectual Property: Finland and China. Rainer Oesch. 28 p.

254/2009 Evaluation of Bioprocessing Expertise in Finland. Colja Laane. 22 p.

242/2009 Foresight for Our Future Society – Cooperative project between NISTEP (Japan) and Tekes (Finland). Eija Ahola and Mikko Syrjänen. 59 p.

241/2008 FinNano Programme – Intermediate Evaluation. Pekka Koponen, Juho-Kusti Kajander and Matti Kuusisto. 20 p.

239/2008 BioRefine Programme 2007–2012. Yearbook 2008. Eija Alakangas & Tuula Mäkinen, eds. 130 p.

236/2008 Major challenges for the governance of national research and innovation policies in small European countries. Mari Hjelt, Pim den Hertog, Robbin te Velde, Mikko Syrjänen and Paavo-Petri Ahonen. 65 p.

232/2008 Future of Enterprise Mobile Devices – From Tornado Age through Value Mess onwards to Mobile Things That Think. J.Kotovirta and M.Nurmela. 19 p.

231/2008 Mobile Enterprise Applications and Business Models. 24 p.

228/2008 MASI Technology Programme 2005–2009. Yearbook 2008.

227/2008 Tekes-Japan foresight – A cooperative project between NISTEP (Japan) and Tekes (Finland). Mikko Syrjänen and Alina Pathan (Eds.)

224/2008 Nanosafety in Finland – a summary report. Tuomas Raivio, Piia Pessala, Mari Hjelt, Pirita Mikkanen, Hanna Kahelin.

219/2007 VICTA – Virtual ICT Accelerator. Final Report. 25 p.

214/2007 Universities, industrial innovation and regional economic development. A report of local innovation systems. Editors: Richard K. Lester and Markku Sotarauta. 231 p.

213/2007 Trends and Opportunities in Packaging R&D in the US. Niels Hauffe, NWV Market Discovery, Inc. 54 p.

212/2007 Consumer Packaging in Poland, Czech Republic and in Moscow Area. 50 p.

207/2007 MASI Technology Programme 2005–2009. Yearbook 2007. Eija Alakangas & Pekka Taskinen (eds.)

Subscriptions: www.tekes.fi/english/publications

June 2010

ISSN 1797-7339

ISBN 978-952-457-505-8

Further information

Petri Ahokangas

Professor, International business

University of Oulu

petri.ahokangas@oulu.fi

Tekes – Finnish Funding Agency for Technology and Innovation

Tel. +358 10 191 480Fax +358 9 694 9196Kyllikinportti 2, P.O. Box 69FIN-00101 Helsinki, FinlandE-mail: tekes@tekes.fiwww.tekes.fi