Coopetition in the cloud age

“Coopetition is thought to be a good business tactic between two businesses that can lead to expansion of the market and the formation of new business relationships. Coopetition is a form of strategic alliance and is common particularly in the computer industry between software and hardware firms.”Investopidia.

“There is an ugly word used to describe the fact the rivals in business some times have to find a way to work together – coopetition. In the ICT* industry everyone knows that, on occasions, competitors have to hold their noses and talk to each other.”The ugly truth about competition by Bob Tarzey with Channel Register.


The telecommunications industry is a good example of a “coopetitive environment” where a number of service providers:

  • collaborate in developing standards
  • negotiate business relationships under interconnect and peering agreements, wholesale carriers’ carrier models and virtual network operators
  • unbundle access to infrastructure and services as prompted by deregulation

This is also true for those supplying them with technologies, gear and services. Generally speaking, many of today’s deployments do entail rather sophisticated multi-vendor environments. That can be driven by any of the following:

  • large scale projects that would necessarily involve more than one vendor
  • two (or more) vendors are asked to be aligned as part of a service provider supply chain strategy
  • decentralized decision making leading to a variety of relationships across units and geographies
  • a best of breed selection strategy that requires end to end systems integration
  • co-creation projects where the service provider involves more than one supplier
  • and when no single vendor has all that is required in the company’s product and services portfolio

Note that carrier grade requirements are set to ensure high availability and, therefore, robust and reliable services. The whole needs to perform as one end-to-end system. Coopetition is, therefore, a fact of life for an industry characterized by demanding service level agreements.

Interestingly enough. embracing the cloud age takes coopetion to new levels because of:

  1. ubiquitous connectedness, ground breaking agility and unprecedented speed
  2. off the shelf hardware and software products that become readily available online services on demand
  3. digital assets living and morphing in data center environments under utility business models
  4. the relentless unbundling of (virtual) machines and (software defined) instruments
  5. distributed assets and processes, openness leading to mashups and end-to-end automation
  6. coopetition and a mindset that amounts to a “cloud noveau” culture and a generational shift

I will follow up with another article that will further develop the above six points and the underlying paradigm to start with.

*ICT: Information and Communication Technologies.

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