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A blog about platform wars : theory and practice.
Estimates vary, but the global software industry probably generates annual revenues of about $500 billion. Industry analysts are saying that up to 25% of new software sales will be delivered as SaaS within the next few years. That implies a shortfall of some $100 billion of license revenue that won’t be collected upfront any more, along with whatever it takes to buy and set up the infrastructure to operate it — maybe another $100 billion?
These are scary numbers, and others can do a better job than I of validating them, but let’s say they’re even half accurate. Will the industry have enough nerve collectively to fund that revenue gap, not just for a year, but over a period of several years as the big switch to cloud and SaaS accelerates? Especially if such a huge financial shortfall coincides with the tail end of what is starting to look like it will be a deep, traumatizing recession?
And now, with the soaraway online advertising market threatening to stall, comes news that Google's software engineers are going to get less time to spend on pet projects and are being told instead to hunker down and work on money-making tweaks to the core business.
If you want to focus narrowly on saying, as perhaps we should, "We're just a software company and we intend to make a business out of software" -- then I think his statements are true. It's obviously a little bit more complicated than that. But, at a conceptual level, the idea that software is not an intellectual property asset is something that we do not agree with. We spend billions of dollars a year to make [software]. Most of the established countries in the world accord it intellectual property status and we work hard to develop patents and uniqueness.
If I had to bet right this moment on the mobile 85-10-5 of 2011 I'd say iPhone, Android, then RIM, Symbian, or something completely new from behind Door Number Three.
Surely if something gets scarcer, it's value goes up, but, by definition, consumption goes down.
If there are fewer pancakes, we may obsess over pancakes, we may dedicate our lives to the great pancake chase. But most of the time, we'll eat bread.
In a recession, the thing that's got scarce is money. And whether we like it or not, we'll have to make do with less money, and more of something else. (Whether that's scrip, LETS, doing each other favours, growing our own food or donating our time to free software.)
Your argument is effectively based on the idea that demand for money is "inelastic" ... that however expensive it gets, people just gotta have it and so anything else will be sacrificed for it. I don't agree.
If there's less money, companies aren't going to start splashing out on *more* software licenses. People aren't going to start buying more CDs or DVDs. *Consumers* will either adapt to go without, or to pirate, or to consume free versions.
And whichever of those three they choose, the effect is the same : less money will change hands while people manage their software and content requirements. And there'll be less money going to programmers and "content creators".
This is true for any other product too. We don't imagine that a recession means more paid work for people in the steel industry. Why imagine that it will mean more paid work for journalists?
The only difference is that we know that when there's no money to pay for steel production, the quantity produced and consumed goes down. Because information isn't scarce in the same way, we don't know whether total production and consumption in the information industry will go down or whether amateurs doing it for free will pick up the slack.
There are two possibilities: first, that Dell is wrong, and their new supply chain approach will not save them, just make them more like everyone else. It could be that their "live suppy chain" approach just got too crufty, too complex - the article linked above suggests more than 5000 possible configurations. Maybe what they needed to do was to make the system smarter again by streamlining and simplifying.
But it's possible too that the competitive advantage to be wrung from a live enterprise only takes you so far, and that in certain circumstances other advantages are more important. It may well be that the PC market has reduced itself to such commodity status that standardization trumps customization. It may well be that the costs of physical goods mean that the laws of virtual networks are only partly true in that realm.
Hmmm. Is it just coincidence that Donahoe is talking about powerful communities when Andreessen’s current baby–Ning–is a social networking platform. Can you say exit strategy?
Admittedly, that eBay buying Ning idea is a leap, but crazier things–like eBay’s acquisition of Skype–have happened.
The long and the short of it is that we have entered into a new era, in which data centers will no longer simply be collections of servers, but will actually be computing units in and of themselves--often made up of similar computing units (e.g. containers) in a sort of fractal arrangement. Virtualization is key to make this happen (though server virtualization itself is not technically absolutely necessary). So are powerful management tools, policy and workflow automation, data and compute load portability, and utility-type monitoring and metering systems.
Google’s protean appearance is not a reflection of its core business. Rather, it stems from the vast number of complements to its core business
So why is [Chrome] significant? It isn't because "Google Chrome is going to replace Windows" or some other such silliness. As it stands now, Google Chrome is a Windows based application whose most interesting features exist in other browsers. A Web browser cannot replace an operating system any more than an automobile can replace an Interstate highway. The significant end user innovation in Google Chrome is that it is bundled with Google Gears. This means that Google Chrome has a mechanism for delivering richer experiences to end users out of the box. Google can now use this as a carrot and a stick approach to convincing browser vendors to do what it wants. Google can make its sites work better together with Chrome + Gears (e.g. YouTube Uploader using Gears) which could lead to lost browser market share for competing browser vendors if this becomes a widespread practice among Google's offerings. Even if Google never does this, the implied threat is now out there.
Chrome will likely force Google's competitors to up their game with regards to adopting newer Web standards and features just to stay competitive. This is similar to what Google did with online mapping and Web mail, and what the Opera browser has been doing by pioneering features like "pr0n mode" and tabbed browsing. So even if Google loses because Chrome doesn't get massively popular, Google still wins because the user experience for browsing the Web has been improved. And at the end of the day, if more people are using the Web because the user experience is better across the board that's just fine for Google. The same way the fact that all online mapping experiences and Web mail experiences have improved across the board is also good for Google.
The next generation of the WWW may be driven by environments and tools that enhance serendipity. Companies that find ways to amplify serendipity may reap the greatest economic rewards as we all struggle to improve our return on attention.
Am I the only one that thinks that Google is beginning to fight too many wars on too many fronts.
Today, I think there's perhaps a simpler and more powerful way to think strategically about platforms.
Let me advance a simplifying proposition: platforms are markets. The most useful way to think about platforms today is simply as markets.
Think about it another way. The main metric that I would use to describe the health of a truly open web is this: That as the ecosystem expands, the raw number of people, companies or groups who hold power inside the ecosystem, and can affect its direction, grows as the ecosystem grows. Put another way, the power center is decentralized over time. Change inside of that ecosystem require more voices to agree that change is good. That’s healthy. And that’s an open web.
The appstore is easily the most interesting part of the iPhone, much more than 3G. The appstore imvho means three things. First the carrier deck constraint is shifted away from the operator or default homepages to getting placed on the appstore's core views (like hot, top 25 and new). Second, and this what is drives the first, "embed date stress" is relaxed somewhat. In the mobile handset biz, phone embed dates are king - missing the date is bad because nobody, statistically speaking, downloads applications - whereas the appstore is easy to use. The appstore allows you to have a hit well after the handset launch. Third, "OTA" (over the air) updates will become the normal way of doing things instead of a feature - bad bug? - requirements 180? - protocol upgrade? Push out a new revision the way we do today with desktop applications and browser plugins. As much as Tim Bray doesn't like sharecropping and objective-c, this is a good for SMEs and innovators. I can imagine handset and opcos cloning the appstore model, right down as far as supporting technology, eg Android supporting an OSGi-a-like, and enhanced developer programs to drive applications. (None of this is good for IMS btw).
Seems to me that it's the usual branding vs. commoditization problem. As long as Dell make commodities (PCs) they have no social object to hang a story around. We know what a PC is and what we want from it. Either Dell can give it to us as cheaply as possible or they can't.
If Dell want a social object / brand makeover they have to make products that are differentiated in a way worth talking about. With English Cut and Stormhoek you had a novel story : "a tailor / wine that blogs". With Dell, "a computer company that blogs" isn't going to fly.
Who's making a differentiated PC today? (Apart from Apple who are at a whole other level.) Basically Asus. They have great stories : a whole new form-factor, a whole new price, new technologies (solid state disks), Linux really making things cheaper, etc.
Dell used to have two good stories : "cheaper because we sell direct without dealers" and "you can customize on our web-site and our super-lean process will build to your design in a day". The first story is probably no-longer available. Doesn't *everybody* sell direct? The second seems to have gone AWOL.
"Customizability" could be an idea that Dell still owns. The right web-site, a cute user-interface, could turn computer shopping into an intensely personal Build-a-Bear kind of emotional experience. Dell could offer wider variety of peripherals, accessories etc. They could invest in and promote their supply-chain, gain green credentials through offering you the chance to build "low carbon footprint" PCs from local or lower-polluting sources. They could create an Etsy-like market for casemodders etc.
But they need to have *something* to tell a story about.
In my mind, there are different types of OS platforms, created for one of several reasons, broadly separated into monetization, control or shared workload. Monetization - as shown by Microsoft - is that if you control a platform that becomes popular, you can charge money for it indefinitely as it's the basis for many other people's work. Control is what Apple and Blackberry do, where they don't license the platform, but use it to ensure they control everything about what happens on their platform and devices. Shared workload is what the Linux folk are about, where even though they lose control and get no fees, they still derive benefits from not having to do everything themselves, and the platform improves and is used more broadly as well with less investment on their part.
Symbian it seems has attempted to do all of this ...
According to an interesting rumour making the rounds: Microsoft is to acquire Yahoo's search business as well as Facebook, and lock both down, to better take on Google. Microsoft is trying to shift from open to closed.
Unlike many other Java scripting languages, JavaFX Script is statically typed and will have most of the same code structuring, reuse, and encapsulation features that make it possible to create and maintain very large programs in Java
1. The Web is the Hub of our social mesh and our device mesh.
The web is first and foremost a mesh of people. . . . All applications will grow to recognize and utilize the inherent group-forming aspects of their connection to the web, in ways that will become fundamental to our experiences. In scenarios ranging from productivity to media and entertainment, social mesh notions of linking, sharing, ranking and tagging will become as familiar as File, Edit and View. . . . To individuals, the concept of “My Computer” will give way to the concept of a personal mesh of devices – a means by which all of your devices are brought together, managed through the web, as a seamless whole.
Much of this will happen under-the-radar. David Armstrong, product and marketing manager for Google Enterprise in EMEA, told me yesterday that Google Apps already has half a million organizations — not individuals, organizations — signed up worldwide, with 2000 more signing up every day. But that astounding adoption rate is visible only to Google. There are no shrinkwrap packages passing through distributors’ warehouses or flying off retailers’ shelves. There’s not even any money changing hands for sign-ups to the free version. It’s just an invisible stream of bits in the ether. Adoption will be mostly unseen, until one day it will suddenly have become too big to ignore.
GAE marks the end of frameworks & the beginning of Platform 2.0. Expect this to be a hum-dimmer of a war between the big players.
The real point is: Friendfeed is a next-gen, open version of Facebook's social feed.
"I think that a lot of the software development community--which I find really, really frustrating--is fixated on Web apps. They write their stuff on the server, it generates HTML, and there is this really big piece of the community that thinks that that is the universe," Gosling said.
"There's a lot more to it," he said. "Blu-ray is a pretty interesting corner of it."
The most important lesson Ray has learned is that we no longer are bound to applications in the monolithic evolution that produced Office. In this new Internet operating system, applications become modules or services that can be loosely coupled together under user control on demand, as needed.