Tim O’Reilly recently gave a talk called ‘Create More Value Than You Capture’

He mentions that software is becoming a commodity and competitive advantage is moving to areas such as data, network effects, and the marrying of hardware and software.

There are many examples of companies leveraging data for competitive advantage:

• Facebook (User behavior)

• Amazon (Customer reviews and buying habits)

• Gnip & Datasift (Exclusive access to Twitter’s firehose)

Network Effects

• Facebook

• Google (Search habits of the masses)

Software and Hardware

• Square (Mobile payment processing)

• Fitbit (Health)