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Alexa: We need to talk about Amazon's ecosystem problem

It wasn’t long before the excitement over the Amazon Echo Show turned sour with an associated startup complaining that the web all-rounder had effectively taken the company on with a similar product.

In an interview with Recode, Nucleus CEO Jonathan Frankel was reportedly “furious” that Amazon had decided to compete with his company’s smart home intercom product. Amazon had last year taken a $5.6m stake in the company as part of its attempts to build a community around its core Alexa voice user interface technology.

“They must realize that by trying to trample over us — a premiere partner in the Alexa Fund ecosystem — that they are going to really cripple that ecosystem and put a warning out for others,” Frankel said.

The word ‘ecosystem’ was co-opted by the technology industry many years ago to describe the process around which powerful organisations recruit partners in the form of ISVs, developers who link to APIs, resellers, skilled admins and so on. At their best, these ecosystems are extraordinarily powerful but they only work if the skeins of trust are not severed.

Microsoft built one of the great ecosystems around Windows. ISVs such as Corel, Micrografx, Visio and others got rich on the back of the fact that they could create complementary programs that were compatible with an operating system installed on virtually every personal computer in business use. In turn, Windows became even more powerful and attractive because it had a readymade army of applications. Millions of developers and admins trained to understand how Windows works; makers of computers, graphics cards, microprocessors, printers, scanners and other devices had to optimise for Windows and the combination. Resellers focused on deploying Windows because there was money to be made. When IBM finally launched a half-decent version of its OS/2 operating system there was little temptation for ecosystem partners to get involved. Ecosystems make the 800-pound gorillas and those gorillas get to do anything they like.

Microsoft is often held up to be a predatory monopolist but it was smart enough to leave plenty on the table for third-parties. That trick was one learned by Apple and Google when it came to their mobile phone ecosystems and Salesforce.com when it came to cloud apps. These three have built their own ecosystems that more accurately resemble a machine where the parts mutually reinforce each other and where it is very difficult for rivals to best the incumbent.

The challenge comes when the company at the core of the ecosystem takes on its partners. Nucleus’s Frankel obviously feels Amazon has done that here. PC makers might well feel the same about Microsoft pushing its Surface devices. If not carefully handled these cracks can turn into chasms that bring down, or at least pose tricky questions of, the mighty.


Also read:
Amazon Echo Show and the race to make homes machines


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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