In case you had not realised, there is a war going on out there!
Actually, there are two wars going on in technology -the war for the “On line World” and the war for the “Off line World”.
So, who is winning this War of the Worlds? By this I mean the major competitive conflict being fought out by the worlds largest Technology Companies. This is not a conflict where there are only two combatants or is there likely to be one winner. However, among the largest companies, it is possible to differentiate strategies which are being pursued for their own corporate goals and which shape the world we live in – both off line and on line. In this post I want to explore what is going on in more detail and to comment on the body count!
In this post I will identify the core combatants and their strategies. I shall identify their historic markets and show that the new markets are evolving and that they are being keenly contested by our combatants. I will summarise some of the recent activities of these core combatants and finally try to identify some of the major mega trends driving the future of these technology wars.
Who are the Combatants?
The top Six combatants are shown below
With the sad passing of Steve Jobs, the mantle of Innovator-in-Chief is up for grabs.
What are their strategies?
Lets try to sum them up concisely
- Apple – Walled Garden – vertically organised hardware, software and content blended with fantastic design
- AOL – Content, as seen by the acquisition of the Huffington Post
- Facebook – Social Networking – the ONE with “ALL the Names”
- Microsoft – Software – Operating System and Applications – computing ubiquity
- Google – organising the world’s information…and access to it – search is the gateway to the internet
- Amazon – global e-commerce, cloud computing services – disintermediation and virtualisation
What are the markets/battlefields in this struggle?
The core markets are defined by the combatants. In the recent past you could have defined the major combatants by the dominant role they held in the markets
- Apple – Niche Computing Systems
- AOL – web portal
- Facebook – Social Networking
- Microsoft – Enterprise and Desktop software
- Google – Search
- Amazon – online book selling
Each is/was a dominant player in its own area. However today new markets are much more complex and competitive. The companies are trying to maintain their historic position while moving aggressively into the newly evolving and emerging technology markets.
These markets are:
- Smart Phones
- Mobile Computing (Tablets)
- Mobile Computing (Apps)
- Social Media
- Operating and Application Software
Where are the current battle being fought?
- Operating Systems; Windows 7.0, Apple OSX, Chrome
- Hardware: Desktop computers, netbooks, tablets and smart phones
- Web 2.0 technology; HTML 5.0/Flash/Windows 7/Java
- Web 2.0; podcasting, blogging, tagging (Like, +1), RSS, social booking marking, social networking (Facebook, Google+)
- Search; Google, Bing, AOL
- Gaming; iOS/Android/Online/Consoles(Nintendo Wii, Microsoft xBox, Sony Playstation)/Facebook(Farmville, Mafia Wars)
- Applications; Android/iTunes/Windows/RIM
- eCommerce; Amazon/iTunes/eBay
- Mobile; iOS5/Android (Honeycomb, Ice Cream Sandwich)/Windows 8
As you can see, there are further dimensions to this war: this is happening online and offline (recent example being all the patent wars being fought in the courts over smartphone intellectual property). In addition, this is a war in both the B2B and B2C space, with different strategies, approaches and tactics being required for each.
So, What are the tactics?
Each corporate action or decision is made either to advance the company in the direction of its core strategy or to create competition for one of the other players in the market – i.e. to make it more difficult for them to succeed.
- Primary Offence – Strategy
- Secondary Offence – Tactics
- Primary Defence – Strategy
- Secondary Defence – Tactics
So what has been going on?
Apple has moved from its original (and very cool) iMac computer into a broader spectrum of consumer electronics. The genius of Jobs was not that he invented anything but that he perfected the integration of hardware and software to deliver amazing products. The iPod became the defacto music player, the iPad the coolest tablet computer (in a market which conventional wisdom had decreed was dead), the MacBook Air is the coolest laptop computer and of course the iPhone has been widely accepted as the market leading smart phone. But the iTunes and the App Store have enabled the company to commercially exploit the software that the Apple hardware can use to an amazing extent.
In doing this Apple is leading the market in mobile computing. The newly introduced iCloud when combined with iOS5 operating system for the iDevices and OSX Lion is moving the consumer into cloud computing and broadening the market for Apple hardware, software and applications. The new Siri personal assistant voice interface on the iPhone 4S is another example of continued market leadership through perfecting existing technology.
AOL is one of the (relative) laggards in this war. AOL still has scale and attracts a considerable amount of traffic. It is too big to be ignored. It has been moving more strongly into content – the acquisition of the Huffington post – but it fundamentally lacks direction.
The Facebook platform continues to grow and to grow in complexity. With Timeline you can now build an online record of your life in text, photos, video and audio formats. It is expanding its horizons into News, Movies, TV. Mark Zuckerburg’s ambition is clearly to make Facebook the ONLY place you need to inhabit on the internet, particularly if all your friends are there too.
Since the start of this century, Microsoft has been playing catch up. It originally missed the internet technology step change. However, recent editions of its software platform are now showing that the giant’s momentum is beginning to make an impact in the business and B2C markets. Windows 8, due out next year is already being hailed as an important further step forward towards integrating its software across all platforms – desktop, tablet and mobile.
But Microsoft is going further. Its strategic alliance with Nokia shows it is serious about the mobile market, it has been making massive investments into cloud infrastructure and moving its software increasingly towards a SaaS model.
The past few months have been momentous for Google. The (open source) Android mobile operating system has been widely embraced by mobile phone and tablets OEMs (including the Amazon Kindle Fire). The June launch of Google+ has brought a real challenger in social networking to Facebook in just a few months. The company acquired Motorola Mobility for $12.5 billion giving them a wide spectrum of mobile patents as well as, for the first time, their own smart phone handset capability.
Google also owns YouTube which is now developing its own content creation strategy. In the meantime, the Google search engine is on track to deliver $30 billion revenues in 2011.
Steve Bezos has long since left book selling behind. Amazon is now a global ecommerce business and has leveraged its online strength into a market leading cloud data service. The Kindle e-reader, designed to encourage digital sales from Amazon, has broadened its attack on this space. At one end the $79 minimalist Kindle moves this into the broadly obtainable consumer market space and at the high end the Kindle Fire is set to try to take on the iPad but at half the price.
So What mega trends will drive the future strategy in these Wars?
Ten years ago the desktop computer was our main interface with the computing world, on and offline. Bill Gate’s vision of a desktop in every home, a radical vision in the early 1980s, had broadly been achieved. Today the technology landscape is radically different again. Technology devices are pervasive and many people have several; desktops, laptops, netbooks, tablets, smartphones, media players all provide us with access to media, networking, computing and the internet.
The marginal cost of an additional sale of a digital product is zero. Everything that can be digitalised will be and technology makes it easy to consumer this media; books, music, movies, TV shows, games and social media.
This technology momentum is changing the way we interact in our daily lives in almost every sphere you can consider. If it is not affecting you today, it is only a matter of time. The information age is taking shape and we are moving beyond the post industrial world.
Business models are being forced to evolve. How can you compete in the offline world if your competitor has access to a global market for his goods and services online. The cost of access to information is rapidly trending to zero and in this new world there is no room left for middle men who add little value but either increase the price of products and services or reduce margins.
There is an explosion in the consumption of digital data and this demand is being met by the exponential increase in the creation of digital data. Where ever you have an online presence, you will have the opportunity to access and consume a wide range of digital information
This is the final step in the value chain. The access to all the data that we input and create by our interactions online creates the new “oil” which lubricates the financial engine of the internet. Mastering, interpreting and exploiting this data is the fuel which drives advertising revenue. The more information these companies gather the more they can predict collective and individual behaviour and demands.
I have tried to get a lot in here and I hope you have gained some perspective on the present and future roles of six of the largest technology companies. The most exciting thing about this is the high rate of innovation being driven by this competitive tension as I have tried to demonstrate in my final paragraphs.
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