The race for software connectivity
“Don’t mention connectivity,” an expert from a highly successful business platform told me recently
– it was just a word that was bandied about too much at online meetings. Naturally, I couldn’t resist.
It may be a cliché or sound annoying, but when people like me sit around in meetings all day
thinking specifically about connectivity, ecosystems, networks and integrations, we need to ask how
things really look like in the market. Are all specialised systems and large platforms keeping pace
with progress, and why is a successful strategy in this area likely to be absolutely crucial for software to remain relevant in the future?
A race towards the perfect ecosystem of software that understands each other and works together
is underway and is already moving ahead quickly. Here are some thoughts about what is important
to think about to maximise your chances of winning this race.
What should I do now to win the race?
If you are working with a specialised system or a larger platform. How does the future look? What do
you do that stands out? Do you have success factors that you want to share? Feel free to contact
me. I’m looking for great thoughts, ideas and stories to highlight here in our forum, so feel free to
get in touch with me directly.
Digitalisation and automation have changed not only how we do things but also what we expect
systems to do. Where at first for many it was about simply doing the same thing in the system as we
did before, just paper-free, the expectation is now that you should not have to do anything at all
that does not require a little more thought.
For an entrepreneur, it is the result that is important, not specifically just your or others’ system,
that can be replaced. We must create the right conditions so that we can be part of the ecosystem
that is formed around companies and individuals.
This puts demands on technology, regulations and people. Open APIs are becoming standard, but
many systems have a long way to go before they are in place and have the necessary functionality
available. In other cases, it is more about creating the right conditions to be able to share data in a
specific context in a secure way or having the opportunity to follow transactions in detail without
the information ending up in the wrong hands.
Regulations act as both a brake and an accelerator for systems to become more ready. In some
cases, automated sharing of data between systems is routinely impossible, at least until the
technology is felt to be secure enough to share sensitive data. In other cases, it is regulations such as PSD2 and Open Banking that force a rapid pace of change and innovation, but even here there are some pieces of the puzzle missing that are needed to make it easier to obtain the right information and use it effectively.
As humans in the middle of all this, we must not only understand the technology and the regulations
that make one or the other course of action possible. We must also be able to think beyond a single
integration and, in a way, predict the future somewhat. What expectations, needs and demands are
coming around the corner? How do they affect the solutions we’re currently developing? We can’t
stop completely. We must develop our way of thinking and our solutions as things move inexorably
forward. At Zwapgrid, we believe that the value of creating the right technical conditions through
our network and the opportunity to share our specialist knowledge are decisive factors for the
success of our partner systems.
Just like the system monoliths of old, there are a number of players who want to be able to offer the
most or take the lead as the most important hubs, but it is difficult to be the best at everything. It is
also difficult to drive progress on all fronts at the same time.
For example, once upon a time, when Apple launched its app store, it created an exuberant creative
economy that did not exist before and behaviours that gained a foothold in a very short space of
time. They continued to own their ecosystem in a way, but also let others in. In the same way, a raft
of ecosystems is now being created, similar to Apple’s appstore, where it is more or less important
to see and be seen.
In other words, for a system to be relevant in the future and on that is ready to take its place, it is
now important to define its strategy around this. Which app hubs are most important? Which ones
should you absolutely not be a part of? Should you create your own? Should you co-operate more
closely with other actors on this? Which functionality should be located where? Should we really
develop and operate the integrations or are there alternatives? It is important to think carefully and
not make ad hoc efforts that do not last over time.
For those who run more specialised systems and are skilled in their field, the ability to sell and grow
is often dependent on also being able to share data with larger banks, business or finance platforms.
This means that integrations and solutions of various kinds usually exist in some form. However, the
space around the value itself and business models is relatively immature and under constant change.
For example, in payment solutions, it has historically been the price of transactions that contributed
the most to profitability, but this is not necessarily how it will look in the future. Most are seeing a
trend towards other types of revenue models. This requires some thought. Should a so-called
integration cost anything in the first place? What is it worth? Who should actually pay? Who will
earn the money? Integrations seem to make sense, but the market is far from mature. There are
currently countless price models and for an entrepreneur, who in many cases has to buy turnkey
solutions, it’s a jungle.
Pricing and business models are one considerastion. Another key area is communication and
packaging. If we can play devil’s advocate, it’s not necessarily the case that an entrepreneur is
looking for an integration. After all, they want a solution to a problem and are also not quite sure
how to define the problem other than that it is troublesome and worth paying for it to be solved.
I think collaborations, in technology, packaging and launch, will be decisive success factors for
everyone who wants to succeed in creating solutions that will last for the ecosystems set to
dominate going forward. Sometimes, a solution can be more direct, i.e., a pure business deal. In
other cases, indirect, where technology and regulations enable innovation from either systems or
The race is on!
Financial systems, ERP systems, operational systems, health platforms, payment solutions, invoicing solutions... it is of course an endless list. Everyone wants to somehow be at the
heart of the ecosystems that form around businesses now and in the future. It is incredibly exciting
and everyone is pushing ahead at various different speeds.
If you want to share your thoughts about your strategy going forward, please contact us and we can
talk more about the future and what is possible with the help of Zwapgrid’s technologies, for
Read more about how Zwapgrid can help your SaaS company provide integrations to your business customers