Wednesday, May 31, 2006

Service Competition

Seth Godin thinks there is a market for Calendar Aggregation.
"If each venue published their schedule as an RSS feed, it seems trivial to put this together. I know, I know, you're already working on it, but I wonder why no one has made the winner yet. This has 'natural monopoly' all over it."
This seems to highlight one of the problems of the service economy. There is a potentially valuable service. But its proper operation would require some investment in hardware and marketing. To justify this investment, you'd have to be convinced that this investment could be protected. But the service would be too easy to replicate, and there would be nothing to stop your users switching to rival services. So the opportunity falls in the crack between easy-and-cheap and expensive-and-difficult.

At least the way Seth states it, this is not a Web 2.0 opportunity. Aggregation is merely a more sophisticated form of 'push' [see my post on The Return of Push] with no user-defined content or meaning. Google and Microsoft and Yahoo and others will pay serious money for good internet presence (think del.icio.us, flickr, myspace). But if all you do is build the best damn calendar aggregation website on the planet, you probably wouldn't own anything the big guys would ever want to buy.

I had similar concerns last April about Luke's plan to aggregate logistics services. Luke has responded to my concerns here, and I wish him well, but it's not the kind of thing I'd like to invest in myself.

I'd be happy to be proved wrong, but market opportunities often don't come to anything. The service economy doesn't always produce the services that people want - even when they are willing to pay for these services. This is a structural problem. It's why people in remote parts of some rich countries don't have access to decent services (think telecoms, cable, broadband) - because no supplier can justify the investment without getting a dominant market share and/or colluding with its competitors. Meanwhile people in the large cities are apparently spoiled for choice.

Within large enterprises, structural problems like these are a matter for SOA governance. But the service economy is not confined within large enterprises, and these structural problems are pervasive. Simple answer in the next post. (Just kidding.)

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