Wednesday, October 23, 2013

The Box-ification of Software Continues

Well, Tuesday came and went and we finally go the big announcement from Apple's Tim Cook. As usual, the world was focusing on all the fun toys - the "boxes" - and, to a large extent, Apple delivered the usual array of sustaining innovations that will make their competitors seethe for the next 6 months. Despite the inevitable critiques, and the occasional gaffe (Maps, anyone?), the products will sell and achieve wide adoption. All this will happen in the face of withering competition from the commoditization experts in Asia. What got my attention yesterday, though, was one of the more modest announcements that is likely to get forgotten until it really matters, i.e. when someone's business is disrupted: Apple is giving away productivity software with it's new machines.

As I type this article into my MacBook Pro, while controlling my stereo from my iPad sitting across my desk, I feel like I should repeat what I have said before: The slave-like attention to integration, user experience, and polish will always win out over gimmickry and slipshod commoditization. For this reason, I think it is quite significant to consider what Apple is doing here, and what it portends for product development trends going forward. There's always an underlying strategy to these types of moves.

First, for the Apple fanatics amongst you, it surely has not gone unnoticed that MS Office on the Mac has become somewhat of a second class citizen. While the Windows suite was recently refreshed, it appears that the Mac version has not had a major refresh since 2011. More importantly, MS has chosen not to support any of the iOS platforms with its flagship productivity suite. There are two consequences of this decision, and both are bad for my friends in Redmond. First, it makes the lives of Mac users more disjoint and unpleasant if their data is locked up inside Office documents that they cannot edit from iPads, Minis, and iPhones. This gap creates opportunities for other people to fill the missing bits, by offering apps to provide the missing functionality. In Apple's case, it also allows them to provide customers a chance to experience what an integrated suite might look like. If you haven't tried the iWork suite, you really might want to now, especially the touch enabled versions for the tablets. Unsurprisingly, you might even start to prefer iWork over the collection of things you have now.

The flip side of this is that Microsoft is not moving the user interface idiom forward on the Apple platform any more. The future is touch and mobile, and we already know Microsoft is not there today even on their own Windows OS. They will proceed to lose ground as the masses continue to buy iPads in lieu of Windows laptops. You would think that learning to get tablets and touch right should be a strategic imperative. Apparently this is not so for them, unless it manifests itself in Windows first. They seem to have forgotten that they themselves learned how to build a GUI by building Word and Excel for the Mac long before Windows was around. In the old days, Microsoft used to be too paranoid to let these kinds of things happen. I don't think it's too far-fetched to infer that with hundreds of millions of iPads out there, it would only take a few good features in iWork to seriously damage Office. Not supporting these devices is very dangerous for MS.

The most profound part of this move, however, is the continuing theme of vertical product integration that is sweeping the low end of the technology industry. I have been talking about it for quite some time in the context of some of the things we did at EqualLogic with iSCSI storage: The lower end of any market abhors complexity. You cannot sell them a bucket of parts and expect them to build a solution from it. They will reward the manufacturers that pull together an end-to-end experience that is flawless and integrated. This is something that is unique to technology - people are afraid of it, and are always looking for an easy way to use it. EqualLogic ran the same playbook as Apple has been running: They are building all the software into a single package and polishing the experience to delight their end user. That package is a single system, either a laptop, or a tablet. In our case it was a storage array.

The big idea to draw from all this is that technology mass markets will continue expect these vertically integrated solutions. We see Apple gradually extending theirs this week. We have been seeing Microsoft doing the same thing with their Slate line and, more recently, their acquisition of Nokia's tablet and handset business. We even see it happening in various parts of the IT infrastructure markets, where more integrated, easy to use products are favored over those that require specialization. This is a mega trend that will affect people's expectations of how to consume technology. More importantly, it will substantially raise the bar for those who want to build that technology.

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