by Merrill R. (Rick) Chapman, Softletter Managing Editor
A new movement is currently rising in the software industry, one devoted to bringing device independence to business and personal computing. This movement’s growth is driven by the increasingly rapid adoption of SaaS and mobile applications and the rapid spread of cloud-wide “layers” that enable people and applications to access and manage devices, digital assets, and services from any point online. This movement will culminate in the creation of a world where the idea that your computing environment is dependent on any single desktop, laptop, smartphone, USB stick, chip or whatever to appear as quaint as loading software from optical disks now seems to today’s millennials. In the near future, devices will morph from computing hubs to docking stations. Your computing assets will follow you in the cloud and will be installable at will on any number of different devices as your business and personal needs require.
Softletter took the lead in exploring device independence and its consequences in our 2014 Business After Windows online conference in 2014. Two years later, the creation of the infrastructure needed to support the movement is moving into high gear. Major financial opportunities await the companies and people who understand how device independence will transform today’s computing milieu. In two new articles, we’ll provide a historical recap of what the industry has experienced when new computing platforms emerge, then analyze the established companies and new startups and players who are in the process of seizing strategic territory in this brave new technology world.
Platform wars periodically break out in high technology in much the same way as Star Wars movie sequels. These battles can focus on software, hardware, and both.The first platform wars began at the dawn of computing in the 40s. By 1964, with the release of the 360, IBM had seized control of mainframes and remains the last significant manufacturer. Once a platform war has been waged and won, the standing of the market leaders and followers tends to stabilize for extended periods of time.
In the 60s, a new computing platform emerged the minicomputer. DEC, IBM, Data General, and Wang fought for dominance, with DEC coming out on top. The company’s triumph was relatively short lived, as the minicomputer market died in the mid-90s, a victim of the microcomputer and PC networking. Platforms are not always immortal.
In the 70s a new platform emerged, the microcomputer. In the early stages of this technology, three powers fought for 8-bit computer dominance, Apple, Tandy (Radio Shack) and CPM-based systems. In 1981 IBM, reacting to the swift growth of this new market introduced the IBM PC. At this juncture, (and without realizing it,) IBM unleashed what I called “The Silicon Beast” on the industry. I describe it this way in In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters:
“Once introduced into the environment and left to fend for itself, the initially microbial PC hardware standard began to mutate into an enormous Silicon Beast that over the years grew ever larger. Eventually, by dint of its size and influence, the PC standard created a hardware ecosystem around itself that allowed it to continue to grow and flourish without IBM’s help or influence.+
In addition to the creation of an independent hardware architecture, microcomputers sparked a software platform war. Microsoft, IBM, Digital Research, Novell and a handful of other players lost to history attempted to gain control of the desktop and network operating system standards. This war ended in the 1990s when Windows drove OS/2 from the PC desktop and Windows NT chased Novell off networks and servers. (During a brief period in the late 80s and early 90s, Apple had an opportunity to establish a competing hardware/software platform via the Macintosh, but chose to retreat to a walled technology garden, where it’s desktop/laptop systems have resided ever since.)
Microsoft benefited greatly from its control of PC desktops and its dominance in servers, but Redmond, lulled by its success, did not handle the growth of open source and SaaS well. Companies are downsizing their IT departments and cutting back on purchases of on-site Windows Server licenses. Major providers such as Google and Amazon have turned to Linux, which be customized to their precise needs (and avoid dependence on a major rival’s technology). Microsoft is fighting back with Azure, but its stranglehold on NOS standards has been broken.
The news for Microsoft in regards to SaaS is even more disturbing. Marc Andreessen’s prediction over twenty years ago that most applications would run in browsers is partially coming true. While Andreessen did not foresee the rise of apps, he must take a certain grim satisfaction in seeing Microsoft lose its grip on browser technology and standards. Whereas Redmond once enjoyed 90%+ browser share with IE, the company is ceding its leadership to Google Chrome and Apple Safari.
In 2007, a new platform war broke out, this time over the smartphone and tablet market. During the struggle, Apple established itself as the dominant smartphone revenue generator (80%+ from software resales), while Android has become the leader in unit market share (an approximate 55% to Apple’s 45% in the U.S.) During this period, Microsoft suffered the ignominy of being for the first time tossed out of a software OS market in which it held a dominant position—Windows Mobile, marketshare, 42%, 2007—Windows Phone, >3%, 2016. Redmond has no realistic prospects of regaining significant market share from Apple or the Android continuum (and has stopped trying).
Tablets are more complex. When Apple released the first iPad, it was an immediate sales success and set the standard for all other tablets. Google, with its open source Android OS, was next to the party, and tablets sales from multiple OEMS enjoyed brisk sales but low margins for several years. Microsoft attempted to enter the tablet platform with Windows RT, but was quickly crushed.
The company’s fall back position has proven to be Windows 10, the latest iteration of Microsoft’s venerable OS. Windows 10 on tablets is no different than the version loaded on desktops and laptops and incorporates a touch screen interface. The OS is a hybrid, incorporating two interfaces in one, a feat the company first attempted with Window 8.X. and failed miserably. Windows 10 is an improved version of 8.X and in desktops and laptops, is gaining traction. But a Windows 10 “tablet” is simply a touch-enabled laptop with a detachable keyboard and is projected to cannibalize sales of desktops and conventional clam shells, not grow the market. The question is “Does it matter?” Smartphone “phablets” have seriously cut into tablet sales and their future is in doubt.
The COBOL Syndrome
Another looming problem for Microsoft and Apple is that their customer bases are becoming increasingly resistant to desktop OS updates. Up through the early 2000s, new OS versions were regarded with excitement and anticipation by most of the market. Microsoft used up much of their customers’ goodwill with the release of Windows Vista and exhausted the rest with the Windows 8.X botch. Despite the fact that Windows 10 is free for most consumers, has been well reviewed, and is generally thought to have repaired most of Windows 8’s problems, reaction to the product from the market has been a collective shrug of the shoulders and a “here we go again” attitude.
Apple is facing a similar problem, despite the fact that the company stopped charging for MacOS in 2013 with Mavericks. Once a person or business has a stable and productive computing environment established, they become increasingly reluctant to disrupt it. New operating system versions offer only incremental improvements over previous versions and are increasingly perceived as being introduced to boost the provider’s bottom line, if not directly, then by breaking various related products and services while not offering significant new customer benefits. Most industry observers, including Softletter, believe Windows 10 will be the last release of Windows via the traditional install and replace model.
To sum up, in today’s world, a person working with computers and software today must manage and interact with:
- Probably a desktop or laptop device and quite possibly both. These will often use Windows, whatever version or possibly Mac OS, whatever version. (The number of Linux users in the marketplace is small, but there are a handful of vocal advocates out there, so we’ll include them as well. We will not attempt to track which distribution.)
- A smartphone. Regardless of their desktop choice, they will also have to interface with another operating system, either iOS, Android, and possibly Windows Phone. (No, we’re not counting Linux or any feature phone OS.)
- Possibly a wearables device such as a watch or fitness tracker. Many of these will interface with iOS or Android, but the watch interface will differ significantly from the smartphone and computer.
- While not yet, soon your car. “CarOS” is coming, though the underlying supplier is unclear. It could be Linux, Apple (rumors have circulated for several years that Apple wants to enter the car business in some fashion) and Google’s already there. Microsoft can’t be discounted and it’s possible a new player could make an appearance. We know of one company that’s heavily forked Android and is developing what they hope will be the ultimate OS for your set of wheels.
- A long series of IoT devices, not to mention traditional peripherals such as printers, input devices, drive arrays, etc.
Other candidates for management include a game console, home management platform, and related devices and systems.
This creates a situation where tomorrow’s digital consumer must master the operations, interface, security, and update cycle of a stream of new devices, applications, and services flooding relentlessly into the market. Currently, we doubt one in ten people understands how to completely secure their desktop or laptop and perhaps one in 20 their tablet/smartphone. Privacy management is another headache. And everyone hates updates. The need for people and businesses to have a single point of control to administer, secure, and upgrade their computing environment is growing steadily.
This need will drive the outbreak of the next platform war, one fought for control of the device independent platform and the portable workspace. If you listen carefully, you can already hear the guns booming in the distance.