This post originally appeared as part of the May 2 Intersect newsletter. Click here to view the whole issue, and sign up below to get it delivered to your inbox every week.
Last week Ford Motor Co. announced it’s investing $500 million in an automotive startup called Rivian. The move might not be so notable if Rivian was simply producing a white-label electric-vehicle chassis (which it does, and which Ford plans to use), but Rivian is also gearing up to sell its own electric pickup truck and SUV models. On the surface, Ford is investing in an upstart competitor; in reality, Ford is investing to remain an industry leader in a future that’s coming whether it likes it or not.
If you haven’t read the details of this partnership, here are a couple of takes that together paint a nice picture of the situation:
- Ford to put $500 million into electric vehicle startup Rivian(Reuters)
- Ford invests $500 million in electric car startup Rivian (Ars Technica)
The future is not just about building smarter, more-connected cars—which Ford is already doing, including in partnership with Amazon around in-car delivery and Alexa capabilities—it’s also about technological advances and lowered barriers to entry (Rivian, for example, operates out of a plant previously built by Mitsubishi) that blur longstanding competitive lines. This is why we see Ford partnering with companies such as Rivian and Volkswagen, and other automakers doing things such as building open manufacturing platforms and working with network specialists on edge-computing standards. It’s increasingly unlikely that any one company, or a small handful of companies, can master every aspect of what will be necessary to build and sell cars in a world where technology and, along with it, consumer demand move lightning fast.
But it’s not just the automotive industry where we’re seeing technology change the nature of competition. We also see it happening via open source software in the movie and televisionindustries, and via companies like McDonald’s acquiring software vendors that also serve other retailers.
Of course, this has been the story in enterprise software for some time now. What began with industry collaboration on open source projects has expanded into cloud, where software-as-a-service specialists are better served by working together than they are by trying to encroach too heavily into each others’ spaces. This is certainly the model for platform providers like Pivotal, which have long realized the benefits of partnering with systems integrators and complementary software companies, and—despite their overshadowing size—is even true of public cloud providers.
Some companies will always take the high-risk, high-reward path of going it alone, but customer loyalty only goes so far when new options and new features are coming online by the day. It certainly seems a lot smarter to acknowledge that you’re going to have to share that pie, while focusing energy on the areas where your company can set itself apart to ensure you still get the biggest slice possible.