Who’s behind the social network’s computing power? You’d be surprised!
There is a long history of companies pooling their resources to achieve a common goal. Sometimes the goal is to sell a comprehensive system to an end user. Sometimes the goal is to assemble a nifty service. The base premise is: one service provider or product offerer cannot provision the final product without the aid of others.
Today we see mashups. A web mashup is a web page or application that combines data from two or more external online sources. Rather than reinvent the wheel, for instance, a company who has agreat weather prediction tool might mashup the software provided by Google Mapping to produce one clean web site where you can search both for weather conditions and the geographies in question.
Long before mashups, there were white label products. A white label product or service is a product or service produced by one company (the producer or manufacturer) that other companies (the marketers) rebrand to make it appear as if they made it. Examples may include DVD players. There might be one gigantic DVD manufacturer in Korea knocking out the devices and Sears, Amazon, Kmart, Wal-Mart all buy them, put their own private label on them and resell the products as their own. It may look like a Best Buy brand DVD player, but it also looks remarkably like a Wal-Mart DVD player at the same time if you just scratch off that name badge and look underneath.
Another example often cited in the social networking space is a white label social network or community. This different than the branded social networking sites like Facebook, LinkedIn or MySpace. If I think my company would benefit, I could offer a social community or network on my web site for my customers and prospects to discuss areas of joint interest. If I’m a travel company, I could use Ning, for instance, set up a community for all those cruise ship enthusiasts to discuss past cruises, future cruises, the best cruises, exotic cruises and best priced cruises.
If I’m a clever moderator, I can learn a lot about my market and create a loyal following of travelers who rely on my social community as one of their primary sources of travel information. It also gives me a chance to correct problems or soothe upset customers in almost real time. If my company is Ron’s Cruises (I should be able to come up with something better hopefully) I could call my new found social network “Cruise Net” and none of the members need to know I used a white label social networking software product to roll out the technology.
These concepts are not new. They were preceded by reseller organizations and alternate channels. When I started in the computer hardware business over twenty years ago, we sold proprietary computers. That means software designed to run on them wouldn’t run on any other brand’s devices. If I could partner with a great bond management package, I could sell all the bond managers on using that partner’s software and they would have to buy my hardware. And they’d have to keep on buying my hardware as they grew and needed more horsepower to run the system. Prime Computer, Digital Equipment, Data General were all built on this premise.
Some proprietary computer hardware companies didn’t bother with a partner program. Their company was so well known that they could sell their proprietary hardware and the buyers would put their software programmers on the task to write applications to run there.
In the mid eighties, UNIX appeared as an operating system and changed the game. Suddenly all computer hardware manufacturers offered a commodity computing device. You could buy a UNIX box from company A, B or C. You could shop price, service and performance. The hardware companies with strong software partners could still drive sales. If you like the bond management software, my long standing relationship with the software company would encourage you to buy my hardware with an endorsement from the software vendor.
The hardware companies who were really clever encouraged those niche software vendors to resell our hardware bundled into the turn key system. The end user bought the application software, the hardware and the team deploying it all from the same reseller: one stop shopping. This is an early example of white label product offerings.
All this activity promoted alternate channels within the sales organization. You could buy my product directly from my company, or you could buy my product from one of my resellers. It behooves me to make sure the partners in my alternate channel reseller organization are happy. In fact supporting my resellers turned them into my customer.
One of the reasons the iPhone is such a big success is that Apple has opened up the device so thatdeveloper partners can easily write applications for the iPhone. Apple worries about turning out a reliable, well priced and cool looking device. Their partners think up great new applications that run on the iPhone and lead consumers to find the device indispensible. In search of a revenue generating model, Facebook opens up their social network to application developer partners. These Facebook “apps” help make money for the developers as well as the Facebook people.
Some of these distributions of responsibility can even exist within a single organization. So if a big computer company is pursuing a solution on behalf of their customer, (selling an enterprise webcasting solution for instance) they may use the “matrix” team that exists internally (a storage drive expert, a desktop computing group, a database expert, and a custom deployment solution team). On those same pre sales conference calls might be a channel partner team member that sells the streaming video software and another from the company that makes the web cams. All these partners figure out which channel the customer will ultimately buy from. The biggest problem is figuring out who’s in charge and leading the team.
The natural evolution of all these patterns of partnering is today’s cloud computing. It may even be transparent to the end user from exactly where the horsepower or tools are coming from…they all appear local. Because I only get to use my software through a browser, it doesn’t make a difference if my accounting software is really run on systems in India; that most of the computing hardware is farmed out to several large virtual computing companies; nor that I’m only charged when I use them instead of investing in hardware and software installed in our company’s computer room. For all I know, today’s company computing room is completely empty except for a couple of guys managing all the contracts and traffic.
Next steps in partnering? Well the lion’s share of the revenue and skill sets still resides in a group of heavy hitter computer companies. They have the marketing dollars and smart people to support and nurture the success of their channel partners. Who better to create social communities for their channel partners to share information? Who better to lever today’s social networking technologies in order to help their channel partners market their wares to end users?
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