The internet of tomorrow will be as dramatic a change from the internet of today as today's internet is from the primitive, unconnected, proprietary computing networks of yesterday. This leads to Porter's second major error. He fails to appreciate that this complex and ever-expanding communications medium will precipitate deep and profound changes to the structures of successful businesses. This model worked best because the costs and difficulties of collaborating with partners outside the firm were greater than performing such activities inside the corporate walls. These new models are possible because the net smashes the costs of partnering.
Companies can now focus on their core capabilities and partner to do the rest.
When done properly, such business webs create better and less costly products and services than the old corporation. Established businesses such as Enron, Citibank, American Airlines, Nortel, Schwab and many product divisions of GE are now transforming themselves by partnering in areas that were previously unthinkable. Boeing CEO Phil Condit calls his company a systems integrator, not an aircraft manufacturer. IBM is a computer company that doesn't make its computers-its partner network does. Napster is causing chaos in the music industry and forcing every company to rethink its value.