Who will win the battle to dominate the next stage of our digital universe?
Our pockets are full of capable but badly coupled devices – and the next revolution surely will go to the innovator who figures out how to make these machines and their diverse applications work together seamlessly from anywhere in the physical world.
Former hedge fund manager Andy Kessler has written a tip sheet that will help you score the fight for the future of computing. He was inspired to do so by the less-than-inspired media coverage of the off-again, on-again mating dance between Microsoft and Yahoo. Kessler's brief, The War for the Web, appears as the lead essay on the Wall Street Journal op-ed page and also at http://www.andykessler.com/ which is his personal website.
Kessler proposes four key elements to a decisive victory:
THE CLOUD
These are the networks of computers sitting remotely in data centers upon which we will increasingly depend for our computational needs – not matter how agile our desktop computers may be. Google, Yahoo, Microsoft, Amazon and even Sun and IBM are serious players, says Kessler, drawing users into their data centers to deliver the goods promised by their applications. But none come close to Google’s $20 billion web-advertising cash stream that it uses to foot the aggressive data-center expansions that are needed to be any kind of serious contender.
THE EDGE
"Edge" is the killer application that drives users to the owners' cloud. Microsoft briefly ruled the desktop digital universe with its ubiquitous desktop applications, but the Justice Department settlement in 2001 seemed to dull its advantage – and the company agreed to spike its most aggressive tricks to dominate. But we're beyond the desktop now, so watch out for Microsoft's agile, shape-shifting Xbox video platform, says Kessler. And while you weren’t watching, Microsoft slipped into the smart phone business where it today provides the fundamental software for about 20% of that market in the U.S.
SPEED
You can build the cloud with vast and capable platforms. You can even introduce and sustain the latest killer search app. But, says Kessler: “Google’s dominant share is as much about speed as it is for relevant results.” He adds: “Now corporate America is evaluating moving its accounting, scheduling, order management and the like into the cloud and speed will be a top priority.” (Google is in for the long haul: They built their speedy data centers next to waterfalls so electricity will be as cheap as possible.)
PLATFORM
Embrace the application even if you didn’t invent it, extend the application’s market aggressively, and innovate in the uses of the application. Embrace, extend, innovate – that is the famous Microsoft mantra, first espoused by Bill Gates back in 1994 – before the turn of the century. It proved its power, says Kessler, as Gates and family shot past first movers like Apple on desktop operations, Lotus 1-2-3 in the spreadsheet space, and Netscape in web browsing. But win one game and another begins. Concludes Kessler: “At the moment, neither Google nor Microsoft, or anyone else has nailed down cloud, edge, speed and platform."
- TOM GOFF
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