When you last took a flight, did you not just sit back for a moment and marvel at how so much complexity had been brought together just so that you could hop on a plane and skip across the planet?
Within the air travel industry, there are travel agents, global distribution systems,
airlines, regulators, airports, aircraft maintenance companies,
insurance companies, aircraft manufacturers, engine manufacturers, fuel
suppliers. When they all operate successfully together, you get air
travel.
Passenger flights are decades into their evolution, it's a mature business. And - it's horizontal. Specialist companies support many airlines at the same time, the airline does not own and control all the parts of the value chain.
I'm curious. What about the web? How will that play out?
The history of human civilisation is full of examples of networks being built and exploited.
Canals, railways, ports, gas, airports, sewerage, roads, electricity, telegrams, telephones, mobile phone networks, social networks, logistics networks, GPS, the worldwide web.
One could argue that these networks form the most tangible poof of human social progress. They provide the means for us to advance our society with learning, health, wealth, knowledge and lifestyle. However, we often take them for granted. We take more notice of the applications that are built upon these networks.
What's interesting is that in an early stage market, companies can form that create a network and also create and sell the products and services for that network. It's a vertical market. Think about how modern mobile phone operators run infrastructure, market to customers, own stores etc. Increasingly though as the market matures, specialists come in that can supply a horizontal layer and do so incredibly well to multiple companies.
Eventually you end up with horizontal specialists. Companies that specialise in applications, companies that run networks, companies that run services that connect applications to networks.
The internet is one hell of a network. I'm really curious to see if horizontal will beat vertical. What will be the role of Facebook, Apple, Google, Microsoft, Cisco, Samsung, Intel etc in the next 20 years? Will they try and own as much of the top to bottom (consumer to network) vertical themselves or will horizontal players dominate? My hunch, just looking at the way that all other human endeavours seem to evolve, is that horizontal will trump vertical.
If that's the case, it opens up all sorts of possibilities for businesses to thrive is as yet under-developed horizontal services or specialist products and applications consuming those services.
The web at 25 years old is the 21st Century Gold Rush. It's far from over.
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