The Amazon Effect....Continued

This article was posted on Computerworld this AM (by me). It made me think about other crazy business models that aren't overtly logical - and how our behavior makes them take shape.

Do you know how LinkedIn makes money? Headhunters. Because you are good enough to not only tell all the world about yourself, your experience, your job, your likes and hates, etc., you make it easier for headhunters to search the site to find you if you fit the bill for an opening. Do you think that the sudden "endorsements" feature of the site is REALLY about having people endorse you? No, it's about having people tell the headhunters what other attributes they can tag you with and thus search you for. Headhunters pay for this function.

It may make you feel nifty that Joan in accounting endorsed you for being a "snappy dresser" but in reality what is happening is your profile is being fine tuned such that the search function of the headhunter can be equally fine tuned. It's brilliant.

Now, having said that, there are often unintended consequences of a successful business model. In this example, how long will it be before HR departments bypass the headhunters altogether and simply do this for themselves? The richer the data set on you the person, the easier it is to hone in on what HR is looking for in an employee.

As a more interesting example of how existing industry victors always react to new or pending movements, read what Big Switch's CEO wrote today here regarding getting out of the open source SDN movement it essentially FOUNDED because Cisco has taken control.

It shows the awesome power of the incumbent to derail many technology-led transformations that have the ability to disrupt the money flow. In this case I don't believe Cisco can ultimately keep SDN from happening universally, but it sure as heck is going to slow down that train for a while. Eventually, if it does see the light of day as I suspect it will, Cisco's core networking boondoggle will come under heavy fire - and it will be forced to adapt its business model in that sector, or abandon it - eventually. In the meantime, it will keep pushing off the market.

Topics: IT Infrastructure Networking