Business Alliance With Your Competitor: When Does It Make Sense?

business allianceAn AI Business Alliance

Amazon and Microsoft have announced that their personal digital assistants Alexa and Cortana will be able to communicate with each other in the near future. On its face, this type of business alliance seems counter-intuitive between technology competitors who each want their AI-driven voice systems to grab larger market share.

Why Microsoft and Amazon Are Cooperating

However, the deal makes sense today where it wouldn’t have just a couple years ago.

Why?

Neither Microsoft nor Amazon were successful in cracking the smartphone market. As a practical matter, Apple’s Siri and Google Now are the two dominant players in the mobile phone personal digital assistant arena with Samsung’s Bixby struggling for adoption outside of South Korea.

Although the tentacles of intelligent personal assistants spread into many areas, Microsoft’s Cortana is primarily focused on its business software. In contrast, Amazon’s Alexa is a driving force in consumer electronics, particularly so-called “smart homes.”

This means the competition between the two companies’ digital assistants is minimal and it benefits both of them because it adds value for their customers.

In other words, your competition can become your ally when it’s mutually beneficial to do so.

Related Article: How To Use Business Contracts To Prevent A Single Point Of Failure

How To Structure The Business Alliance

Your deal should be properly documented with a professionally prepared agreement that does the following:

  • Defines the scope of the alliance, including each party’s deliverables;
  • Specifically excludes aspects you do not want to be part of the deal;
  • Identifies the parties’ respective rights to intellectual property (e.g. ownership and licensing) and other assets involved;
  • Apportions any income and expenses;
  • States the duration of the alliance, including any renewal and early termination provisions; and
  • Provides a dispute resolution process if there’s a disagreement.

An experienced business lawyer can paper your alliance with the right legal documents so that you get what you want from the transaction.

Author Mike Young, Esq.

Internet Lawyer Mike Young provides contracts and other efficient legal solutions to business owners and C-level executives of privately held companies. To get legal advice from Mike, click here to set up your phone consultation with him.

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