Business - Written Tuesday, December 15, 2009 by Nick Vitalari - 0 Comments

Going Vertical: The New Reality of Vertical Integration in the Era of Business Platforms and Ecosystems

A recent article in the Wall Street Journal by Ben Worthen, Cari Tuna and Justin Scheck pointed out a resurgence of vertical integration as a company strategy as seen with Oracle’s recent acquisition of Sun Microsystems, HP’s pending acquisition of 3Com, and Apple’s acquisition of chip maker, P.A. Semi last year. These acquisitions provide these companies with more control over core features and assets in their business models and position them to rely less on others for essential product and service components. Such schemes also intend to protect proprietary advantage, avoid “leakage” of plans, patents, and various flavors of their secret sauce, and add distinctive and differentiated features to their products. Of course such vertical integration plays create new options for product extensions, new service offerings and in some cases afford entry into new markets. But at a deeper level there’s more to this story. This is not your grand-father’s or great grand-father’s brand of “going vertical.” Continue…