Understanding Convergence

“Convergence” is a concept often referenced, but less often defined or explained. This short essay (“Understanding Convergence”) develops an account of convergence and discusses the strategic implications of that account.

We begin by presenting an example of the phenomenon of convergence, in this case, the example of the smartphone and its operating system. From that example, we derive a more general account. As we will see, convergence has two primary aspects: technical convergence and market convergence. Technical convergence is essentially an abstraction, one that unifies a set of applications used by a population of users in a common kind of context. Market convergence is achieved when that abstraction is adopted for use by a significant proportion of the potential population of users. Technical convergence is required for market convergence, but technical convergence does not guarantee market convergence. After presenting the general account of convergence, we discuss some general observations about the phenomenon of convergence, and then present a sketch of the strategic considerations for achieving convergence.

The most important ideas: convergence is a general phenomenon. It happens again and again in technology-based markets, and in technologies in general. Convergence disrupts the markets for the applications which are converged. Market convergence creates value for customers and application developers. Further, market convergence yields sustainable competitive advantage and significant value for the company (or companies) which achieve it using their platforms. The general structure of convergence has important strategic implications which can be applied to achieve it and win in the marketplace.