From the beginning to December 2017, AT&T and Amazon Web Services expanded their collaboration for the Internet of Things. Unless you are following these large technology giants, this might seem like a random event. However, as it turns out, this news is part of a continuum of such news as they reach out for consumer digital share of wallet.
Over the years, these internet giants have started developing service offerings that clearly compete with one another. Seemingly, technology companies tend to develop service offerings in the same areas at the same times. They all invest in new technologies such as voice recognition and augmented reality in an attempt to maintain an edge over the other technology giants. Some companies invest in these technologies not because they have a clear vision of how to utilize these technologies, but simply so that they do not miss out on any future business opportunities developed around them.
Market evolution has forced technology companies to break out of their original business model. In an effort to attract users to their platform, companies are beginning to produce and invest in their own content, instead of content created by users, as we expect in social media. The competition between internet giants has led to new businesses such as Amazon, YouTube and Facebook starting to produce their own video content.
These technology giants are now investing in self-driving cars. Currently a great deal of capital is owned by private households. Families own their apartments and cars. Self-driving cars will make families less likely to own their own car which will likely move huge amounts of capital from private households into mega companies that own a lot of cars.
Customer and user are two different things
What are these technology giants aiming at with their investments? Users of both Facebook and Google don’t bring these internet giants any revenue; at least not directly. However, the more users Google and Facebook have, the more revenue they get through their true customers: other companies who pay them vast sums in advertising fees.
Technology giants are competing against each other in these aspects. What used to be share of wallet in the physical world has now changed to digital share of wallet measured by the following four dimensions in the digital world:
- Share of consumer’s day
- Share of consumer’s data
- Share of consumer’s communication
- Share of consumer’s wallet
Each of these giant brands has increased their digital share of wallet at least in these areas:
- Amazon has a share of consumer wallet, as with Amazon Go.
- Google has a share of consumer data.
- Facebook has a share of consumer day.
- LinkedIn has a share of the entire consumer work day social media collaboration.
Tip for a leader: Consider that competition is more than just the next-door company
Who is competing with you for customer time and money? Most probably, it is one of these technology giants. Consumers spend more and more of their money in online stores and more of their time on YouTube, Netflix or social media.
Also, if you forget all those fast-moving startups, you are likely to miss more subtle changes in your industry. It’s like raising the temperature of the water slowly: before you realise it is already boiling! It’s better to change your business first than to do it when you are forced into it by others.