Introduction
One of the most valuable assets of a technology company is its know-how. However, in the Business to Business (B2B) marketplaces conflict of interest issues are putting companies’ confidential information/trade secrets at risk.
Businesses should be aware of the risks and strategies for keeping their secrets safe.
It is not unusual to find, for instance, a Solutions Supplier (“SS”) that has built and designed the entire backroom infrastructure for an Applications Service Provider’s (“ASP”) business exchange, and then proceed to build the same for a competitor. During this period, the ASP would have most probably provided the SS details of its business model, its business plan, the inner workings of its financial structure and proposed future products expansions.
There is an increasing occurrence of such situations due to the convergence and consolidation in the B2B marketplace. What are the risks associated with such relationships and how should companies deal with them?
The Risks
The risks are clear, a partner today could very well become a competitor tomorrow! Therefore, one may find one’s business model replicated elsewhere using knowledge acquired from its business. Of course, it could also results in loss of a company’s market share, competitive advantage and valuable intellectual property.