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Verizon Abandoning Walled Garden Network & Business Model: Implications for Healthcare

Wha…?  why are we talking about Verizon…isn’t is a healthcare blog?

When a major, multinational company does a complete turnaround on its operating and business model, it’s worth noting and examining the reasons behind the switch.

Wireless Week reported on a presentation made at the CTIA conference this week by Verizon COO, Lowell McAdam:

In a nod to the future, McAdam also said Verizon Wireless will scratch its “walled garden” approach because “in a 4G world, we need to turn that guarded model inside out.” The operator will transform its business model, he said, because it realizes that innovation in applications and use will come from outside the company.  Verizon will open its network, applications and location technologies to outside developers…[emphasis added].

Ars Technica reported further on McAdam’s commentary: 

I think collaboration and openness will be the operating platform for the future if we’re to bring the full promise of what 4G LTE brings. That’s really the new paradigm, the new model for operating in the entire wireless industry.

“Now I know that some of you in the audience are saying, ‘C’mon Lowell, you guys are the poster child for walled garden.’ What I’d say is that for the first 25 years that garden approach of closed systems served the industry pretty well. But in a 4G I think we need to turn that garden model inside out.”

How big a deal is this? Here’s an imaginary comparable statement that might be made by Judy Faulkner, CEO of Epic:

In a nod to the future, Epic will scratch our model of closed, non-interoperable, proprietary EMR technology. We realize that innovation in applications and use will come from outside the company.

We have come to believe that collaboration and openness will be the operating platform for the future if the full benefits of health IT are to be realized. That’s the new paradigm for healthcare.

Now I know that some of you are saying, ‘C’mon Judy, you guys are the poster child for closed health IT. What I’d say is the for the first 25 years closed systems have served us well, but it’s time to turn that model inside out.

Not holding my breath that this will happen soon.

However, there are important lessons and precedents here. In a world where making connections among people is increasingly valuable, expect companies (not all) to see the light about the value of collaboration and more open business models.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License. Feel free to republish this post with attribution.

11 Comments

  1. Vince Kuraitis on October 7, 2010 at 5:37 pm

    Verizon Abandoning Walled Garden Network & Business Model: Implications for Healthcare http://bit.ly/awm2Yo #HealthIt #EHR #HITPol



  2. Let's Talk Reform on October 7, 2010 at 5:40 pm

    RT @VinceKuraitis: Verizon Abandoning Walled Garden Network & Business Model: Implications for Healthcare http://bit.ly/awm2Yo #HealthIt …



  3. KentBottles on October 7, 2010 at 5:42 pm

    RT @VinceKuraitis: Verizon Abandoning Walled Garden Network & Business Model: Implications for Healthcare http://bit.ly/awm2Yo #HealthIt …



  4. Aparna M K on October 7, 2010 at 6:26 pm

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  5. Netspective Health on October 7, 2010 at 6:47 pm

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  6. Alltop Health on October 7, 2010 at 6:54 pm

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  7. Netspective Health on October 8, 2010 at 12:47 am

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  8. Michelle W on October 8, 2010 at 7:13 am

    Interesting story, especially giving the persistent Verizon iPhone rumors floating around the web (Apple being what I would call the true poster boy of the walled garden syndrome). I wonder if this move is being encouraged by Google, the phone carrier’s Android partner?



  9. Paul Tarini on October 8, 2010 at 8:11 am

    @VinceKuraitis: Verizon to open its network, apps, location technologies to developers: implications for health care: http://bit.ly/bGmFHI



  10. Leonard Kish on October 8, 2010 at 11:03 am

    Big news. Verizon Abandoning Walled Garden Network & Business Model: Implications for Healthcare http://bit.ly/9RVwvN



  11. Vince Kuraitis on October 8, 2010 at 11:26 am

    Michelle, Yes…McAdam referenced Verizon’s relationship with Google/Android as one consideration. In my view, Android’s openness puts a lot of pressure on other mobile players to open their models or be left behind. Apple has enough critcal mass to sustain a viable walled garden model, but most others don’t.