The march of the middlemen

Historically, a lot of companies and people made boatloads of money acting as intermediaries without adding much in the way of value.

James Robertson over at Smalltalk Tidbits, Industry Rants writes:

The RIAA (and the MPAA, for that matter) are fighting a war they can't win. They are busily irritating their real and potential customers--either suing them, or making life difficult for them--while the real pirates sail along unimpaired. The amount of inertia in that business is astonishing--the good times for all the do-nothing middlemen are over, and it's time for the labels to accept that fact and get on with their lives.

I don't bring this up because I want to replow the well-worked ground of the out-of-touch content industries, but because Robertson highlights a fundamental point about today's business world. Historically, a lot of companies and people made boatloads of money acting as intermediaries without adding much in the way of value.

I see this in my own industry. When I worked for a system vendor in pre-Web days, we subscribed to the services of one industry analyst firm whose main business was essentially collecting product data sheets from everyone and faxing them, on request, to subscribers. Thus, for example, if I was getting ready for a product announcement and needed information on the competing Digital or Wang systems, I'd call up this firm and ask for any info it had on X, Y, and Z products. The firm would send it to me without anything in the way of commentary or other color. But given that I could hardly call up the Digital or Wang sales office and request this info myself, it was still a useful service.

Of course, that this was actually a business once seems almost laughable today. (And, in fact, it was even worse than I described. Not only did we have to subscribe to a service to get this information, but we had to subscribe to micro-sliced technology segments such as midrange systems or workstations.)

That's not to say that there isn't still money to be made in establishing connections and filtering data. But it's worth remembering that--for the most part--it's now about the direct value provided by those services rather than just charging a gatekeeper fee for using a magic key to unlock some basic data.

About the author

Gordon Haff is Red Hat's cloud evangelist although the opinions expressed here are strictly his own. He's focused on enterprise IT, especially cloud computing. However, Gordon writes about a wide range of topics whether they relate to the way too many hours he spends traveling or his longtime interest in photography.


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