The New Moats
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The document discusses the evolution of business models and how traditional economic moats are being challenged by massive platform shifts in technology. It emphasizes that new incumbents leverage systems of intelligence, which integrate multiple systems of record to create defensible business workflows that are more sustainable. The rise of full-stack companies and intelligent applications is presented as crucial to establishing new competitive advantages in the market.
The New Moats
- 1. The New Moats Why Systems of Intelligence™ are the Next Defensible Business Model Jerry Chen
- 2. In business, I look for economic castles protected by unbreachable moats. - Warren Buffet “ ” Photograph: Stuart Isett/Fortune Most Powerful Women
- 3. To build a sustainable and profitable business, you need strong defensive moats around your company.
- 4. Massive Platform Shifts Mainframe Client/Server Cloud/Mobile Virtual Containers AI Chat IoT Mini Computers
- 5. Traditional Economic Moats Economies of Scale Network Effects
- 6. Other Traditional Moats Deep tech/IP/ Trade Secrets High Switching Costs Brand and Customer Loyalty
- 7. Strong moats help companies survive through major platform shifts, but surviving should not be confused with thriving.
- 8. Old Moats Can Be Destroyed Massive platforms shifts— like cloud and mobile — are technology tidal waves that create openings for new players to build paths over and around existing moats.
- 9. No More Moats? The “new incumbents” operate at massive scale, have strong network effects, high switching costs, and well known brands, making it hard for new companies to enter. Open source tools and cloud have brought down technology barriers making it hard to monetize deep IP.
- 10. Going Full Stack Today the market is favoring “full stack” companies, SaaS offerings that offer application logic, middleware, and databases combined. Consumer Seamless integration of hardware and software. (e.g. iPhone) Enterprise SaaS at the top of the tech stack instead of having to buy individual pieces and build their own apps.
- 11. The Stack of Enterprise Systems TM
- 12. The Stack of Enterprise Systems TM Interfaces between users and systems of record. Data and workflow for a critical business process. TM
- 13. The New Moats: Systems of Intelligence™ TM TM
- 14. The New Moats: Systems of Intelligence™ TM TM Systems of intelligence™ leverage multiple systems of record to produce better or new business workflows. Over time, they become their valuable and defensible by becoming their own system of record. TM TM
- 15. Where can you build Systems of Intelligence™? TM TM Customer Centered Apps: Apps centered around the customer journey Employee Facing Apps: HR & IT Critical Business Workflows: ERP, Asset Management, Financials Infrastructure: Security, Compute, Storage, Networking and Monitoring/Management Vertical Clouds: Build a system tailored toward a specific industry.
- 16. Intelligent applications will be the foundation of the next generation of great software companies because they will be the new moats.