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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: 100cfm who wrote (27910)	7/14/2000 10:28:33 AM
From: sditto	Read Replies (1) \| Respond to of 54805

When it comes to defining proprietary, Webster may in fact be part of the problem: Main Entry: proprietary Function: adjective Etymology: Late Latin proprietarius, from Latin proprietas property -- more at PROPERTY Date: 1589 1 : of, relating to, or characteristic of a proprietor <proprietary rights> 2 : used, made, or marketed by one having the exclusive legal right <a proprietary process> In the context of the Gorilla Game, the first definition is more applicable. The Gorilla does not have to have "the exclusive legal right" to the proprietary architecture it just needs to have control of the "characteristics". This is also know as a de facto standard (one the marketplace has settled on) as opposed to a de jure standard (one a standards setting committee has settled on). Moore is saying the Gorilla needs to have a de facto standard. In the case of QCOM, they developed a proprietary standard which has been adopted by the standards bodies (an almost inevitable occurrence if you have some outstanding innovation in the regulated telecom spectrum space since entrenched competitors can use the standards process to try and water down your contribution while shifting future control to the committee). The key will be to continue to grow the architecture in ways that wrap proprietary characteristics around the now open standard using their large stream of royalty payments to remain on the forefront of innovation and business application. This is where the value chain comes into play. QCOM needs to continue aggressively building their value chain to the point that when they make a change/extension to the architecture their value chain rushes to adopt it and when some other competitor makes a change they ignore it. That's the essence of control of an open proprietary architecture. In the case of NTAP, SEBL, CMRC, etc. - they all have open proprietary architectures which they control. However, the power of an application Gorilla is not quite as strong over customers and the value chain early so (sort of like the tail wagging the dog) so they need to make sure they build out their architecture while imbedding themselves into the workflow (applications) or infrastructure (hardware) of the environments where they are installed. The idea is to become so entangled in their innerworkings there is no chance they could ever pull you out by the roots. In the case of application software, you want to become an integral part of the personal and professional lives of the people who install it, run it, and use it so people describe themselves not as a "CRM expert" but "I'm a Seibel guy". In this case, the proprietary architecture extends beyond just technology into the business fabric as well. sditto@wordsreallydohavemeaning.com