The Emergence of Competing Ecosystems
November 25, 2012
The center of gravity of computing has shifted from the desktop to the pocket. The emergence of the cloud coupled with Apple’s iPhone and iPad has forced a shift from the reining desktop paradigm that had Microsoft creating the operating system and numerous partners like Dell, HP, Lenovo, Acer, Sony, Samsung, etc. all creating hardware that was compatible with Microsoft’s operating system. This worked well for the better part of the last two decades but it is rapidly being displaced by competing ecosystems.
As I said in Apple’s Velvet Handcuffs, Apple has created a complete ecosystem that has its own “network effects” where it’s customers enjoy synergies of staying inside Apple’s “walled garden.” If you purchase a iPhone you have to use iTunes, the App Store and iCloud. If your thinking about getting a tablet it behoves you to get an iPad because it uses the same operating system and applications. Zero learning curve. Apps work seamlessly across devices. Now, say you want to consume your media on your TV, well Apple TV is the easiest way to make that happen. Once you are in the apple orbit, the Macintosh becomes more compelling via the iOS “halo effect.”
Google recognizes this and is working feverishly to replicate Apple’s ecosystem with great success. The balkanized Android market is standardizing on recent versions of the Android OS with their “Nexus reference platforms” and Google Play store. Samsung’s Galaxy S3 has become the de-facto iPhone challenger but their a de-facto iPad tablet challenger has has not yet emerged. Even Amazon is attempting to pursue a “walled garden” approach with their Kindle and Prime initiatives.
Currently, there is a duopoly – iOS and Android – and I believe there is room for at least one more “walled garden” ecosystem in the marketplace. Who will fill this void to make it a oligopoly? It seems like Microsoft and RIM have the best chance.
Where does this leave Microsoft the 800-pound gorilla of the desktop era? They recognize the situation and are attempting to walk a tightrope by creating the same kind of ecosystem but in a way that does not alienate their partners. This is a difficult task akin to being “almost pregnant.”
Microsoft created a beautiful and innovative device called the Surface in which they dictate the entire experience. How you buy it – the Microsoft Store. They created the hardware and the specs – Surface. They created the operating system – Windows 8 RT. They created the software – Mail, Calendar, Office, etc. They created how you buy apps and how they are installed and updated – Windows Store. Oddly, Windows Phone apps are not compatible with Surface RT apps. I suspect this will be viewed as a mistake when it is all said and done.
Where does this leave RIM? They are attempting to “reinvent” themselves with Blackberry 10 and a refresh of their existing “walled garden.” I think this is a real long shot as once customers are in an ecosystem their is significant inertia for them to remain. All their apps, knowledge, experience and content is in that ecosystem. RIM has none of that with current customers. Their only advantages are BBM and the physical keyboards on their devices.
All of these companies are attempting to create “walled garden” ecosystems where they hope to do so much for their customers that they will never leave. It is ironic that the “walled gardens” of the past – AOL, Prodigy, CompuServe – were destroyed by the open internet. Only history will show what happens to these “walled gardens.”
As a CIO, I have to adapt to the realities of these ecosystems as they represent the direction of where computing is going. How are you adapting to the shift from the desktop to the pocket?